incorporated in the mass of merchandise for sale in a neutral country, or, as it is more commonly known, with goods intended to be incorporated in the "common stock" of the country. The United States Government urge with some force that trade statistics are not by themselves conclusive in establishing an enemy destination, and that such statistics require careful scrutiny. On the other hand, the mere fact that goods, no matter of what description or in what quantities, are ostensibly destined to form part of the common stock of a neutral country, can not be regarded as sufficient evidence to prove their innocence or to justify the assertion that any attempt to raise questions as to their ulterior destination is unwarranted and inquisitorial. It is a matter of common knowledge that large quantities of supplies have, since the war broke out, passed to our enemy through neutral ports. It was pointed out in Sir E. Grey's note of the 17th July, 1915, that it would be mere affectation to regard some of those ports as offering facilities only for the commerce of the neutral country in which they are situated. They have, in fact, been the main avenues through which supplies have reached the enemy from all parts of the world. In the case of goods consigned to these ports, the ships' papers convey no suggestion as to their ultimate destination, and every device which ingenuity can suggest, or which can be contrived by able and unscrupulous agents, is resorted to for the purpose of giving to carefully organized arrangements for supplying the enemy the appearance of genuine transactions with a neutral country. His Majesty's Government can not bring themselves to believe that it is the desire of the United States Government that traffic of this kind should be allowed to proceed without hindrance. 19. The question whether goods dispatched to a neutral port were intended to become part of the mass of mechandise for sale in that country is one of fact. Quite apart from the conclusions suggested by the figures, there is a considerable body of evidence that many of the goods which have been shipped to neutral ports during the war were never intended to become part of the common stock of that country, but were earmarked from the beginning for reexport to the enemy country. If they had been intended to form part of the common stock, they would have been available for use in that country; yet at one time in the early days of the allies' efforts to intercept all the commerce of the enemy, when they found it necessary to hold up certain cargoes of cotton on their way to Sweden, it transpired that though the quays and the warehouses of Gothenburg were congested with cotton, there was none available for the use of the spinners in Sweden. 20. Confirmation of the fact that many of the shipments to neutral ports were never intended to become part of the common stock of the country is also to be found in some of the contracts which have come to light since the policy of intercepting all commodities on their way to or from the enemy country was introduced. One of those which has been disclosed is a contract with a firm in Germany for the sale of no less than 50,000 bales of cotton linters at a price which was about double that which linters were fetching in any other country than Germany. The whole quantity was to be shipped to neutral ports. Various shipments made under this contract have been held up, and in all cases the goods were shipped with papers and under conditions which concealed the enemy destination altogether. Sweden. is not in normal times a large importer of cotton linters, and it certainly would not be reasonable to maintain that, because the ship's papers did not disclose this contract of sale or the enemy destination, shipments of linters under this contract should be regarded as intended to become part of the mass of merchandise for sale in Sweden. 21. However sound the principle that goods intended for incorporation in the common stock of a neutral country should not be treated as contraband may be in theory, it is one that can have but little application to the present imports of the Scandinavian countries. The circumstances of a large number of these shipments negative any conclusion that they are bona fide shipments for the importing countries. Many of them are made to persons who are apparently nominees of enemy agents, and who never figured before as importers of such articles. Consignments of meat products are addressed to lightermen and dock laborers. Several thousands of tons of such goods have been found documented for a neutral port and addressed to firms which do not exist there. Large consignments of similar goods were addressed to a baker, to the keeper of a small private hotel, or to a maker of musical instruments. Will it be contended that such imports ought to be regarded as bona fide shipments intended to become part of the common stock of the country? 22. Similarly several of the shipments which the allied naval forces are now obliged to intercept consist of goods for which there. is in normal circumstances no sale in the importing country, and it has already been pointed out in a recent decision in the British prize court that the rule about incorporation in the common stock of a neutral country can not apply to such goods. The same line was taken in some of the decisions in the United States prize courts during the Civil War. 23. In the presence of facts such as those indicated above, the United States Government will, it is believed, agree with His Majesty's Government that no belligerent_could in modern times submit to be bound by a rule that no goods could be seized unless they were accompanied by papers which established their destination to an enemy country, and that all detentions of ships and goods must uniformly be based on proofs obtained at the time of seizure. To press any such theory is tantamount to asking that all trade between neutral ports shall be free, and would thus render nugatory the exercise of sea power and destroy the pressure which the command of the sea enables the allies to impose upon their enemy. 24. It is, of course, inevitable that the exercise of belligerent rights at sea, however reasonably exercised, must inconvenience neutral trade, and great pressure is being put upon the United States Government to urge the technical theory that there should be no interference at all with goods passing between neutral ports, and thus to frustrate the measures which the allies have taken to intercept commerce on its way to or from the enemy. It may not be out of place to recall that the position is somewhat similar to that which arose in the United States in the war between the North and the South. All students of international law and of military history are aware that the blockade of the Southern States was the most important engine of pressure possessed by the North, and that it was on the point of being rendered effective through the use by blockade runners of neutral ports of access. It is well known that the United States Government took immediate steps to stop such trade, and that the United States Supreme Court extended the doctrine of continuous voyage so as to cover all cases where there was an intention to break the blockade by whatever means, direct or indirect. 25. The configuration of the European coast is such as to render neutral ports the most convenient for the passage of German commerce, and just as it was essential to the United States in the Civil War to prevent their blockade from being nullified by the use of neutral ports of access, so it is essential to the allied powers to-day to see that the measures which they are taking to intercept enemy commerce shall not be rendered illusory by the use of similar ports. The instructions issued by Mr. Seward during the Civil War show that he regarded the continuance of the blockade against the Southern States as absolutely vital, and he repeatedly instructed American representatives abroad to assure foreign Governments that, while he was fully alive to the great inconveniences caused by the cutting off of the supplies of cotton from Europe, yet he could not, as American Secretary of State, "sacrifice the Union for cotton." The American representatives in Europe in their published reports again and again expressed the opinion that, whatever might be the policy of the Government, the peoples of Europe would never consent to side with the power that upheld slavery against the power which represented freedom. Their opinion was entirely justified by the result, and in fact neither the French nor the English Governments took any decided steps toward breaking the blockade, in spite of the tremendous pressure which was brought to bear upon them and the terrible suffering of the cotton operatives of this country. Indeed, President Lincoln himself acknowledged, in a message to the laboring classes of Manchester, his high sense of the spirit of self-sacrifice which they had exhibited in their policy toward America. His Majesty's Government have, of course, no desire to enter upon any examination of the issues involved in that historic conflict, but no one will question the respect which is due to the determination then shown by the French and British peoples not to range themselves on what they believed to be the side of slavery or consent to action which they held might be fatal to the democratic principle of government, however great the pressure exerted by commercial interests might be. 26. His Majesty's Government desire to assure the United States Government that every effort is being made to distinguish between bona fide neutral commerce and that which is really intended for the enemy. The task is one of exceptional difficulty, and the statistics show that a great volume of imports intended for the enemy must have passed through adjacent neutral countries during the war. As an instance,the imports of lard into Sweden during the year 1915 may be taken. In that year the total import of lard into Sweden from all sources was 9,318 tons, of which no less than 9,029 tons came from the United States. In the three years before the war, 1911-1913, the annual average import of the same article was only 888, of which 638 tons came from the United States. It is difficult to believe that the requirements of Sweden in respect of lard, even when every allowance is made for possible diversions of trade due to the war, could suddenly have increased more than tenfold in 1915. The inference, indeed, is irresistible that the greater part of these imports must have had another and an enemy destination. 27. It may readily be conceded that the efforts to intercept enemy commerce passing through neutral countries can not fail to produce some soreness and dissatisfaction. His Majesty's Government have therefore spared no pains in their endeavor to mitigate the inconvenience which must inevitably be occasioned to neutral traders. In pursuance of this object they are resorting to the policy of ascertaining the total requirements of the country concerned, and intercepting such imports as may be presumed, because they are in excess of those requirements, to form no part of the normal trade of the country, and therefore to be destined for the enemy. 28. The total net imports of a particular commodity by any country in normal times gives a satisfactory index to its requirements, and where these are provided for on a generous scale, suitable allowance being made for the commercial dislocation inseparable from a state of war, it is not unfair, after 18 months of war and in the light of the experience which has now been gained, to invite the prize court to regard with suspicion further consignments of any kind of goods of which the imports have already exceeded a figure ample to satisfy the country's requirements. 29. It ought not to be difficult to arrive at a satisfactory understanding with all parties on the subject, as the official statistics afford information not only as to the quantities of particular commodities required by neutral countries, but also of the sources from which they are usually obtained. Arrangements of this nature will be of great service in removing the friction and misunderstanding which now arise, as it will help the commercial classes in the neutral countries to form an idea of the limits within which their trading operations are not likely to encounter difficulty. 30. The adoption of such a system, although not unattended by difficulty, has been greatly facilitated by agreements made with the organizations which control imports in the neutral countries, as well as by arrangements with some of the shipping lines, and with several of the interests concerned in the import of particular commodities from neutral countries. His Majesty's Government intend to avail themselves of every opportunity which may present itself in order to bring about a more extended adoption of this equitable system. 31. Moreover, the fact that a neutral country adjacent to the enemy territory is importing an abnormal quantity of supplies or commodities, of which her usual imports are relatively small, of which the enemy stands in need, and which are known to pass from that neutral country to the enemy, is by itself an element of proof on which the prize court would be justified in acting, unless it is rebutted by evidence to the contrary. Hostile destination being a question of fact, the court should take all the relevant circumstances into consideration in arriving at its decision, and there seems to be no reason in principle for limiting the facts at which the court is entitled to look in a case of this kind. 32. The second section of the United States note (paragraph 16-24) deals with the validity of the measures against enemy commerce which were embodied in the British Order in Council of March 11, 1915, and in the French decree of March 13, and maintains that these measures are invalid because they do not comply with the rules which have been gradually evolved in the past for regulating a blockade of enemy ports, and which were summarized in concrete form in articles 1-21 of the Declaration of London. 33. These rules can only be applied to their full extent to a blockade in the sense of the term as used in the Declaration of London. His Majesty's Government have already pointed out that a blockade which was limited to the direct traffic with enemy ports would in this case have but little, if any, effect on enemy commerce, Germany being so placed geographically that her imports and exports can pass through neutral ports of access as easily as through her own. However, with the spirit of the rules His Majesty's Government and their allies have loyally complied in the measures they have taken to intercept German imports and exports. Due notice has been given by the allies of the measures they have taken, and goods which were shipped or contracted for before the announcement of the intention of the allies to detain all commerce on its way to or from the enemy countries have been treated with great liberality. The objects with which the usual declaration and notification of blockade are issued have therefore been fully achieved. Again, the effectiveness of the work of the allied fleets under the orders referred to is shown by the small number of vessels which escape the allied patrols. It is doubtful whether there has ever been a blockade where the ships which slipped through bore so small a proportion to those which were intercepted. 34. The measures taken by the allies are aimed at preventing commodities of any kind from reaching or leaving Germany, and not merely at preventing ships from reaching or leaving German ports. His Majesty's Government do not feel, therefore, that the rules set out in the United States note need be discussed in detail. The basis and the justification of the measures which the allies have taken were dealt with at length in Sir E. Grey's note of July 23, and there is no need to repeat what was there said. It need only be added that the rules applicable to a blockade of enemy ports are strictly followed by the allies in cases where they apply, as for instance, in the blockades which have been declared of the Turkish coast of Asia Minor or of the coast line of German East Africa. 35. Some further comment is perhaps necessary upon the statements made in paragraph 19 of the United States note, where it is said that because German coasts are open to trade with Scandinavian countries the measures of the allies fail to comply with the rule that a blockade must be effective. It is no doubt true that commerce from Sweden and Norway reaches German ports in the Baltic in the same way that commerce still passes to and from Germany across the land frontiers of adjacent States, but this fact does not render the measures which France and Great Britain are taking against German trade the less justifiable. Even if these measures were judged with strict reference to the rules applicable to blockades, a standard by which, in their view, the measures of the allies ought not to be judged, it must be remembered that the passage of commerce to a blockaded area across a land frontier or across an inland sea has never been held to interfere with the effectiveness of the blockade. If the right to intercept commerce on its way to or from a belligerent country, even though it may enter that country through a neutral port, be granted, it is difficult to see why the interposition |