insofar as those articles were not required by the United States or the Allies, and would not, if their exportation was permitted, directly or indirectly benefit the Central Powers. This statement of the War Trade Board was not to be considered as an agreement or contract of the United States with the Swiss Government but was to be considered as a declaration of the domestic or internal administrative action of the Board. The Board did not assume the power or authority to make contracts or agreements binding upon the Government of the Uinted States, nor did it "assume to deal in regard to the policy of the United States relating to foreign affairs."

2. The distribution of articles should be authorized by the Société Suisse de Surveillance Economique. This organization, set up in 1915, acted as the consignee of goods shipped to Switzerland by the Allies.

3. If Switzerland was able to obtain elsewhere supplies of the articles enumerated in the agreement, the amounts thus obtained should be subtracted from the quantities stated.

4. The importation into Switzerland of these articles was for domestic consumption. Notwithstanding the maximum quantities stated in the schedules, the amounts should be limited to genuine internal requirements, "with due regard" to the importation into Switzerland from other countries than the United States of articles which could be used as substitutes.

5. None of the articles imported from the United States and "no product, by-product, or waste and no alloy, compound, or ingredient thereof," should be directly or indirectly exported to or used for the benefit of the Central Powers, except in a few specified instances. 6. The Swiss Government should transport from the United States at cost, 1000 tons of cargo each month destined for the American Red Cross in Switzerland. If the Swiss Government should be unable to secure adequate ocean tonnage to transport supplies from the United States, aid should be extended in securing additional neutral tonnage, consistent with the tonnage requirements of the United States and the Allies. The Swiss Government would cooperate to the end that ships under Swiss charter bound for the United States should carry full cargo.

CHRISTMAS CONCESSIONS AND TEMPORARY AGREEMENTS

The War Trade Board stated on December 5, 1917, that, in view of the "growing feeling" in the northern neutral countries against the embargo, it proposed to license one or two cargoes of coffee, kerosene, or lubricating oil for Denmark, Norway, Sweden, and the Netherlands. This concession "should have a good effect in these

"Document 297.

countries at the Christmas season" and should aid negotiations for agreements with them.

The terms of the offer, "as an expression of Christmas good wishes," were set forth in a letter of December 14 from the Acting Chairman of the War Trade Board to the Danish Minister. The Board desired as an evidence of good will, to allow certain shipments which should benefit the Danish people. It was prepared to license "some thousands of tons of kerosene and of coffee" on ships designated by Denmark. In return Denmark should charter to the United States, at current market prices, an equivalent amount of tonnage for either two West Indian round trips or one South American round trip. These voyages would occupy about the same time required for the round trips of the Danish vessels going to Denmark.

The War Trade Board reported on January 16, 1918, that under this offer it had licensed 1,000 tons of coffee and 3,000 tons of kerosene for Denmark. The Board also reported the status of arrangements for Christmas concessions to Norway, Sweden, and the Netherlands.

During negotiations in January, the War Trade Board stated that each European neutral nation was "looking to us in some measure to meet its needs and we have not supplies in sufficient quantities to meet these requirements in addition to our own" and those of the Allies." The United States had, "through conditions not of its own imposing, become commodity trustee for a large part of the civilized world," and was burdened with the unpleasant task of distributing an inadequate supply to many "distressed " nations. In this distribution the United States must be governed by the needs, not the desires, of those with whom it had to deal. Every available ton of shipping of all nations, the Board stated, "must be utilized both to increase the size of the too-small loaf and to speed its distribution when cut up." These results could not be accomplished without the employment in the danger zones of a substantial portion of the tonnage of all nations.

On January 23 the War Trade Board expressed its conviction that "the surest and most effective way to expedite negotiations with border neutrals" was "the continued maintenance of complete embargo "42 However, the Board had reached the conclusion that its attempt to maintain a strict embargo against Scandinavia and the Netherlands had been unsuccessful.

Negotiations with neutrals resulted in the signature toward the end of January of two temporary agreements. The first, with the

39 Document 301. 40 Document 310. "Document 313. 43 Document 316.

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Netherlands, is treated below. The second was concluded on January 29 by representatives of Sweden, the War Trade Board, and the British Government." This arrangement provided for the exportation from the United States to Sweden of 10,000 tons of fuel oil, and 25,000 tons of phosphate rock, and for the export from Great Britain to Sweden of 25,000 bags of coffee. The Swedish Government guaranteed that neither these articles nor any products from them, would be exported from Sweden, and that no similar articles would be exported during three months from the arrival in Sweden of the articles imported under this arrangement. Before any of the above concessions were made to Sweden, at least 100,000 tons of Swedish ships were to be chartered to the United States Shipping Board and to firms nominated by the British Government for "Allied service in war zone."

LICENSE REQUIREMENTS FOR ALL EXPORTS

In 1916 the British Embassy at Washington inaugurated the practice of giving shippers of goods from the United States to Scandinavian countries, letters of assurance to facilitate the passage of their shipments through the British naval patrol. When the United States entered the war this practice was still in effect.

The Law Adviser stated in his memorandum of May 17, 1917, that the United States would undertake gradually to issue licenses for exports on the condition that they should be recognized by the British naval patrol and by British authorities as of the same value as letters of assurance. The United States was unwilling to have British letters of assurance accompany an American license. The aim of the United States, he stated, was "finally to substitute complete licenses for letters of assurance; but naturally this will have to be accomplished gradually, taking, for example, certain articles at a time." Beginning with the proclamation of July 9, 1917, a few articles became subject to export license when shipped from the United States. Additional articles became subject to license under proclamations of August 2747 and November 28.48 Finally, all articles exported from the United States became subject to export license under a proclamation of February 14, 1918.49

The War Trade Board explained in connection with this proclamation of February 14 and one of the same date requiring licenses

51

for all articles imported,50 that these measures were forced upon the United States by the "critical tonnage situation and the necessity of availing ourselves of every possible means of maintaining our armies in France." 1 The two proclamations subjecting to control the entire foreign commerce of the United States did not mean an embargo on exports or a prohibition of imports. They merely placed in the hands of the President the power to regulate and this power would be exercised "with the single purpose of winning the war."

Meanwhile, negotiations between the United States and Great Britain had been carried on for the discontinuance of letters of assurance. On January 10, 1918, the War Trade Board stated that it was prepared to eliminate them.52 On February 18 the Board informed its London representative that the following understanding had been reached with the British Embassy, for the "complete elimination" of letters of assurance:

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1. The United States would recognize existing "control machinery" in neutral countries, reserving the right to propose changes in personnel, form of organization, and method of control.

2. Trade representatives of the United States and Great Britain in northern neutral European countries would "constitute themselves informal local joint committees" to supplement and supervise the workings of domestic control organizations. The War Trade Board agreed on March 6 that these committees should also include representatives of France and Italy.54

3. The first step in an import transaction would be for the buyer to secure a permit from his local control organization. This import permit would be reported with comment by the local joint committee to an inter-Allied committee at London.

4. The seller would then apply for an export permit. The exporting country would pass on the question of conservation and the consignor and if these tests were successfully passed, the application would then be referred to the inter-Allied committee at London.

5. The inter-Allied committee would decide whether importation could be permitted in view of rationing agreements and whether the consignee and ultimate purchaser were satisfactory.

6. The inter-Allied committee to be utilized for the time would be the existing contraband committee; whether a new inter-Allied blockade committee should be created would be subsequently considered.

7. The War Trade Board's representative at London would cable the recommendation of the committee to the Board, which expected to follow that recommendation. Although the Board reserved the right to overrule the London decision, this reserved right would not be exercised without previous exchange of views with Great Britain.

A similar practice would be adopted by Great Britain, and the War Trade Board's representative on the committee would be given opportunity to scrutinize British applications to export. No license would be issued over his objection without previous exchange of views with the United States.

8. Rations would not be apportioned among the several co-belligerents; the buyer would be entirely free to select his own market. 9. When the neutral buyer desired to purchase in another neutral country, his import permit " may be submitted through local committee to London Committee with name of consignor and London Committee in such cases may pass on the transaction in its entirety and its decision will be final."

10. The War Trade Board would license freely, "but with discretion," shipments under $100 in value, without reference to London. 11. This general arrangement would apply to shipments to Denmark, Norway, Sweden, the Netherlands, Faroe Islands, Iceland, and Greece.

12. The arrangement should be inaugurated immediately in the case of Iceland, and "also in respect of Holland and Sweden as soon as export of non-essentials begins."

Two days later, February 20, the War Trade Board announced that, as Sweden and the Netherlands had concluded temporary agreements with the United States, the Board would consider applications for the export to these countries of certain listed articles.55 The list of articles was "a common one" agreed to by France, Great Britain, and the United States. The inclusion of an article in the list did not necessarily mean that its exportation would be freely permitted by any or all of the nations as "principles of conservation will be applied as heretofore."

On May 4 the War Trade Board stated that it had approved the extension to Denmark of the "relaxation of the embargo on nonessentials." 5 Norway was not considered in this connection in view of the fact that an agreement had been concluded with that country.57

The Board reported on May 10 its disagreement with a plan for relaxing the embargo in favor of pro-Ally firms, as it would "seriously weaken the force of our embargo."58 As the War Trade Board had already agreed to the principle of permitting imports of nonessentials, additional relaxation would operate primarily to release essentials. The adoption of the plan would be the practical lifting of the embargo, the Board stated, leaving exports to be controlled by a white list rather than by a black list. The Board felt that the creation of such a white list would be a very difficult problem and likely to create commercial jealousy among the Associated Governments.