ship to a preliminary warning that the blockade is in force, and the penalty to be inflicted on a captured blockade runner, are all subjects on which different views have prevailed in different countries and in which the practice of particular countries has been altered from time to time. The one principle which is fundamental and has obtained universal recognition is that by means of blockade a belligerent is entitled to cut off, by effective means, the sea-borne commerce of his enemy.

15. It is the same with contraband. The underlying principle is well established, but as to the details there has been a wide variety of views. As for unneutral service the very term is of such recent introduction that many writers of repute on international law do not mention it-it is possible, in the view of His Majesty's Government in these circumstances, to maintain that the right of a belligerent to intercept the commerce of his enemy is limited in the way suggested in your excellency's communication.

16. There are certain subsidiary matters dealt with in your excellency's communication to which I think it well to refer. Among these may be mentioned your citation of the declaration of Paris, due, no doubt, to the words which occur in the memorandum sent by me to your excellency on the 1st of March, wherein it was stated that the allied Governments would hold themselves free to detain and take into port ships carrying goods of presumed enemy destination, ownership, or origin, and to our announcement that vessels might be required to discharge goods of enemy ownership as well as those of enemy origin or destination.

17. It is not necessary to discuss the extent to which the second rule of the declaration of Paris is affected by these measures or whether it could be held to apply at all as between Great Britain and the United States. In actual practice, however, we are not detaining goods on the sole ground that they are the property of an enemy. The purpose of the measures we are taking is to intercept commerce on its way from and to the enemy country. There are many cases in which proof that the goods were enemy property would afford strong evidence that they were of enemy origin or enemy destination, and it is only in such cases that we are detaining them. Where proof of enemy ownership would afford no evidence of such origin or destination we are not in practice detaining the goods.

18. His Majesty's Government have been gratified to observe that the measures which they are enforcing have had no detrimental effect on the commerce of the United States. Figures of recent months show that the increased opportunities afforded by the war for American commerce have more than compensated for the loss of the German and Austrian markets.

19. I trust that in the light of the above explanations it will be realized that the measures to which we have resorted have been not only justified by the exigencies of the case, but can be defended as in accordance with general principles which have commended themselves to the Governments of both countries. I am glad to be able to assure your excellency that we shall continue to apply these measures with every desire to occasion the least possible amount of inconvenience to persons engaged in legitimate commerce.

I have, etc.,

(The New York Times, Aug. 4, 1915.)

E. GREY.

On May 20, 1915, the British submitted a memorandum touching upon interference with neutral rights:

British memorandum, May 20, 1915, in reference to the detention of American ships and cargoes. (The memorandum has a paragraph attached comparing the exports of the United States to belligerent and neutral countries in January and February, 1914, with those in the same months of 1915. An additional table shows an increase in the American exportation of bacon and lard to neutral countries in March, 1915.)

First. There are at the present moment three American ships detained in this country. Two of them are cotton ships, which are dealt with below. The third is the steamer Joseph W. Fordney. This vessel, with a cargo of foodstuffs consigned to E. Klingener at Malmo (Sweden), was brought into Kirkwall on April 8. She had been sighted by His Majesty's ships about 10 miles from the Norwegian coast, and had thereupon endeavored, with the evident desire to evade search, to escape rapidly into Norwegian territorial waters, but with

out success.

On the vessel's arrival in Kirkwall inquiries were at once addressed to His Majesty's minister at Stockholm, with regard to the consignee of the cargo, and a reply was received to the effect that no person of that name could be identified at Malmo, though there was a person of that name who resided at Gothenburg, and was manager of the Gothenburg branch of Hugo Hartvig, and who had stated that the consignments addressed to him on board the Joseph W. Fordney were intended for storage in Malmo.

Second. The suspicious conduct of the vessel in endeavoring to elude His Majesty's patrols and the known connections of the consignee of her cargo have tended to confirm other evidence which has come to the knowledge of His Majesty's Government that the foodstuffs were in reality destined for Germany. It was accordingly decided that the cargo must be placed in the prize court, and the vessel is at present discharging at Portishead, England, on the completion of which operation she will be released.

His Majesty's Government feel satisfied that in the circumstances of this case undue interference with American interests can not with reason be imputed to them.

Third. The number of neutral vessels carrying American cargoes and at present held up is 36. Of these, 23 carry cargoes of American cotton. The United States Government are aware that since the enforcement of the blockade measures announced in the supplement to the London Gazette of the 12th of March last His Majesty's Government have acted as regards shipments of American cotton in accordance with the provisions of an arrangement arrived at in collaboration with representatives of the American cotton interests. The terms of the arrangement are as follows:

A. All cotton for which contracts, sale, and freight engagements already have been made before March 2 is to be allowed free transit or bought at the contract price if stopped, provided the ship sails not later than the 31st of March.

B. Similar treatment is to be accorded all cotton insured before the 2d of March, provided it is put aboard not later than the 16th of March.

C. All shipments of cotton claiming the above protection are to be declared before sailing and documents produced and certificates obtained from consular officers or other authorities fixed by the Government.

Fourth. In accepting this scheme, which, it may be noted, applies to shipments of cotton for a neutral destination only, the principal representatives of the American cotton interests described it to His Majesty's ambassador at Washington as conceding all that the American interests could properly ask. It was never suggested that vessels or cargoes with an enemy destination should be allowed to proceed. His Majesty's Government were, moreover, given to understand that the provisions of the arrangement were acceptable to the United States Government.

Fifth. It is intended shortly to furnish a statement showing precisely what cargoes or portions of cargoes His Majesty's Government have dealt with under the above arrangement, and as regards those which they have decided to purchase at the contract price under the terms of paragraph A of the arrangement direct discussions have already been opened with the special representatives of the American parties interested in London.

Sixth. A considerable portion of the cotton has already been sold, and arrangements are being made for handing over the proceeds to the parties entitled to receive the total value as a first installment of the completed transaction. It is obvious that all these arrangements require some time for adjustment. Meanwhile it is not believed that the original owners can, as appears to be apprehended, be suffering acutely by the delay of full payment. It is to be presumed that in accordance with the customs of trade the owners drew bills to the value of their goods before or at the time of shipment; and, if such bills have been negotiated in the usual way, it is difficult to understand why the drawers should be put to inconvenience on this account, at least before the date when the bills fall due.

Seventh. On an impartial review of the facts it will, His Majesty's Government feel sure, be admitted that no arbitrary interference with American interests has, in regard to these cargoes, occurred, seeing that His Majesty's Government has acted throughout in conformity with the terms of an arrangement agreeable to the interests concerned and that United States citizens will suffer no pecuniary loss.

Eighth. As regards other American cargoes or portions of cargoes which have been placed in the prize court. His Majesty's Government resort to this measure in cases where either the goods concerned are contraband or there is evidence that although ostensibly consigned to a person in neutral countries they are in reality destined to the enemy in contravention of the rules of blockade. The right to submit such cases to the public investigation of a judicial tribunal is one which His Majesty's Government can not forego, and they feel convinced that the enlightened opinion in the United States can not adversely criticize their course of action in this respect.

Ninth. It is true that a number of these cases have been pending in the prize court for some time. This is notably the case in regard to certain vessels carrying large shipments of meat and lard osten

sibly consigned to Scandinavian ports. The United States Government are, however, no doubt aware that much of the delay involved in these instances is due to the fact that the negotiations have been carried on for many weeks with a representative of the principal American meat packers, for an arrangement designated to limit importation into neutral countries adjacent to Germany, to quantities actually required in those countries for bona fide home consumption. The American meat packers have demanded as a part of the settlement to be agreed upon that His Majesty's Government should buy the cargoes of several ships now held up in the prize court. Hence the delay in bringing these cases to adjudication.

The negotiations for an amicable settlement have, unfortunately, come to a standstill owing to the exorbitant terms insisted upon by the representative of the American packers. This stage having now been reached, His Majesty's Government have decided to go on with the prize-court proceedings in these cases, and it is not expected that a decision will be much longer delayed.

Tenth. It may finally be pointed out that repeated complaint, as to injury suffered generally by American trade in consequence of interference due to British naval measures, derives little substance from the published American trade returns. A table of figures taken from these returns and showing the amount of recent American trade with Germany and with neutral countries supplying Germany is annexed hereto. It certainly tends to disprove any contention that American trade with neutral countries has recently suffered. It will be seen that whereas American exports to Germany and Austria in February, 1915, fell by $21,500,000, as compared with the same month in 1914, American exports to Scandinavia, Holland, and Italy rose by the enormous figure of $61,100,000.

Eleventh. Similar figures for the month of March have not yet reached His Majesty's Government, but they have received statistics for that month of the value of exports and imports through New York, as issued by the collector of the port, and while pointing out a large increase in the value of exports in 1915, compared with those of 1914, as shown in the tables annexed, they desire especially to call attention to a separate statement indicating the increase in the amount of the export to Scandinavian and Dutch ports of two commodities only-bacon and lard. These figures show that as against 1,253 boxes of bacon and 9,816 tierces of lard exported to the ports noted in the above countries in March, 1914, there were exported in March, 1915, 32,222 boxes of bacon and 95,676 tierces of lard.

Twelfth. His Majesty's Government consider that the abnormal increase in supplies imported by neutral countries, as shown in these statistics, alone justifies their assumption as to the ultimate destination of many items in cargoes consigned to one or the other of the countries in question in the vessels which they have detained, but they would call attention to the fact that it is only when they have believed themselves to be in possession of conclusive evidence of the enemy destination of a cargo that they have seized such a cargo, and that American interests, as for instance in the case of cotton, have received especially sympathetic consideration. (The New York Times, May 21, 1915.)

The Secretary of State, on May 21, made the following statement touching an error in the foregoing:

The foreign-trade advisers' attention has been called to the statement of the foreign office of Great Britain, published in this morning's papers, an extract from which follows:

Fourth. In accepting this scheme, which, it may be noted, applies to shipments of cotton for a neutral destination only, the principal representatives of the American interests described it to His Majesty's ambassador at Washington as conceding all that the American interests could properly ask. It was never suggested that vessels or cargoes with an enemy destination should be allowed to proceed. His Majesty's Government were, moreover, given to understand that the provisions of the arrangements were acceptable to the United States Government."

The plan referred to is the one which was entered into between the cotton shippers of this country and the British Embassy, a portion of which is quoted in the Statement of the British foreign office.

Without discussing at this time the statement that "it was never suggested that vessels or cargoes with an enemy destination should be allowed to proceed," the foreign-trade advisers, who informally and unofficially represented the cotton shippers in the negotiations which led to the so-called cotton arrangement, state that it was distinctly understood between Sir Arthur Cecil Spring-Rice, the British ambassador, and Robert F. Rose, the foreign-trade adviser conducting this discussion on behalf of the American cotton exporters, that nothing done by the foreign-trade advisers should be regarded as official, and that everything done was to be considered as informal and unofficial, and in no way binding the United States Government to any arrangement reached, or be construed as a recognition of the order in council to be issued or the declaration of March 1 which has been issued. This statement was made to the British ambassador on March 3 when the first conference in the matter was held, was repeated at each subsequent conference, and each time the absolute assurance from the British ambassador was received that, in acting for the cotton shippers in any way, the foreign-trade advisers were to be regarded as not representing the United States Government in any manner. (The New York Times, May 22, 1915.)

Statement of the British Embassy, May 21, 1915, correcting the error in the foregoing:

The terms of the arrangement quoted in the British statement as telegraphed were arrived at in London between a private representative of the American cotton interests in London and British officials in London. The reference to the British ambassador in paragraph 4 is, therefore, an error.

The arrangement in question formed the subject of conversations between the ambassador and representatives of the cotton interests in this country. There never was any question of a formal and official understanding between the United States Government and the British Embassy. (The New York Times, May 22, 1915.)

A further statement of England upon the treatment of neutral rights on the sea, June 17, 1915:

British memorandum, June 17, 1915, in reference to the treatment of American commerce. (According to the letter of the American