tons. Altogether, including the mercantile tonnage seized by Cuba, about 175 vessels, representing nearly 1,000,000 tons, had been added to the shipping resources at the disposal of Germany's foes. Should the fifteen vessels taken "in custody" by the Argentine Government be ultimately seized, another 76,000 tons would be lost to the Central Powers. Should the remaining South and Central American Republics break with Germany, about 600.000 more tons would be released to the Allies. There were 89 Teuton ships in the ports of Chile alone, aggregating 318,000 tons. The Teuton tonnage actually seized at this time was enough to offset the losses of two and a half months of ruthless subsea warfare, provided 400,000 tons were taken as a monthly average of submarine destruction. And that average as the. season advanced steadily grew less.

There were now ninety-one German and fourteen Austrian vessels in ports of the United States, exclusive of the Virgin Isles. Under the terms of a joint resolution of Congress, each of these ships which was owned at the time it came under American jurisdiction "in whole or in part by any corporation, citizen or subject of any nation with which the United States may be at war when such vessel was taken," could be seized and operated in the service of the United States. If the vessels of Austrian register were owned in part by Germans, that ownership rendered them liable to seizure on the same terms as the German ships, regardless of our relations with Austria who so far had made no formal declaration of war. The gross tonnage of this fleet was 662,513. Of this gross tonnage all but 67,817 were of undisputed German ownership. Dr. Karl Helfferich had told the Reichstag main committee that the submarine campaign of ruthlessness had sent 1,600,000 gross tons of shipping to the bottom in two months. These figures had been disputed, but not disproved," and the agitation in England for more active measures against the U-boats confirmed the general understanding that the toll of shipping had been heavy.

In some German vessels the damage was much greater

They were declared at a joint meeting of Entente Admirals to be 40 per cent. too high.

than in others; in all it was sufficiently great to render the ships useless for weeks. The work of repairing was begun immediately on their seizure. Of the ships in custody 31 were now in New York harbor. Others were distributed among ports on the Atlantic, Pacific and Gulf Coast of continental United States, in Honolulu, Porto Rico, and the Philippine Islands. In the Philippines were 23, ranging from the 10,981-ton Princess Alice of the North German Lloyd to the 499-ton Wiegand of the Deutsche Sudseephosphat. The Elsass, another North German Lloyd boat, having a tonnage of 6,591, was at Pago Pago. The ships were of all sizes, from the 54,282-ton Vaterland in Hoboken, to the 499-ton Wiegand. Many were cargo carriers. The transformation of passenger-ships into transports or freighters was not difficult. The hardest task was to repair the machinery, which was built abroad, and for which parts had to be made to replace injured members. The total tonnage of these vessels was more than one-third of the steam tonnage under United States registry in foreign service in 1916, and a little less than one-seventh of the coastwise tonnage. The use of the seized ships for the transport of foodstuffs to Europe. as planned, would go far to counter-balance the losses of Allied and neutral shipping due to U-boat attacks. The utilization of this great fleet became one of the immediate duties of the Government. Before the summer was over, with expert machinists under naval supervision, several ships were ready for sailing. By the end of July the Vaterland, now the Leviathan, was at her Hoboken pier flying the Stars and Stripes.

Estimates showed that Germany would emerge from the war with a net loss of more than 50 per cent. of her merchant ships. It would, therefore, be many years before she could resume her place in the commercial world. The United States had acquired an opportunity of emerging from the war second only in merchant ships to Great Britain. Germany's total merchant shipping was accounted for as follows: Lost by mines or torpedoes, 152 vessels, representing a tonnage of 452,000; retained or captured by enemies, 267, with a total tonnage of 807,000; in the United States and neutral harbors, 621, with a total tonnage of

2,341,000; in home ports, 490, of 2,419,000 tons. The shipbuilding industry in Germany, so far as merchant ships were concerned, had been stagnant since the first of the war. English shipyards, meanwhile, had been working at capacity with merchant bottoms and were turning out vessels at the rate of 1,000,000 tons a year. American yards had not yet reached capacity, but when they did, within a few months, they were expected to exceed the British output. Both British and American merchant ships were standardized. It was with these ships, protected by destroyers, the most deadly foe of the submarine, that the United States and the Entente nations expected to defeat the U-boat campaign.

Up to the end of 1916, the war marine losses of the Allies and neutrals had amounted to 4,500,000 gross tons sunk and 300,000 tons damaged by mines, torpedoes and gunfire. During 1915 and 1916 about 3,700,000 tons of new shipping had been put into service, and not far from 1,000,000 tons of ships captured from the Central Powers had been converted to the purposes of their enemies. On the balance, therefore, up to the end of 1916, had it not been for the immense demands of the Navy and Army for supply and transport ships, there would not have been any great call for the services .of a "shipping controller." But some 70 per cent. of the total British tonnage available for the Allies had been requisitioned for purely war purposes, so that the amount left-British, Allied, and neutral-for carrying on the international commerce of the world was reduced to a bare half of what had been at work upon the same task in the year before the war. This was the situation at the end of 1916. At the outbreak of the war Germany owned 5,500,000 tons gross as against the 21,000,000 tons of the British Empire. The Central Powers put together could not have mustered more than 6,600,000 tons in comparison with Allied shipping of 28,500,000 tons, and neutral shipping of 11,300,000 tons.

By April 20, approximately 3,000 German residents of the United States were believed to be under close surveillance because of their activities in behalf of the German Government before the United States entered into the war, or because of their still active pro-German sympathies. The

Department of Justice had a largely increased field-force of investigators keeping so close a watch on suspects that it became possible to arrest virtually every man under suspicion within twenty-four hours. Suspects were located in every State of the Union. Most of them had been under surveillance prior to the entrance of this country into the war, but hundreds of names had been added to the list as auxiliary workers. In addition to 500,000 civilian employees on the Government's pay-roll in all departments actively engaged in reporting information to the bureau, all sheriff's and their deputies throughout the country were cooperating with the Department to the extent of reporting information which might aid in detecting and apprehending persons working against the interests of the United States.

For many weeks Germany failed to take seriously the entry of the United States into the war. Not until July were there any sure indications that the landing of our troops in France, the defeat of a submarine attempt to intercept transports, and the general financial, military, and naval preparations under way in this country, had made any impression on her. There was now less flippant belittlement of what was being said and done in this country and less confidence that, in any case, Germany could force a peace upon her enemies in Europe before America could get help enough over the sea to rescue them. In place of that, there had ensued a tone of wrath and bluster, which was a sure sign of waning confidence and growing fear. There were also indications that the light of truth about what had been done, what was still being done, and what was liable to happen, was slowly making its way among the German people.

By the first week in June it was decreed that all exports from the United States of food products and basic supplies should be restricted under what was known as the Espionage Law. The proclamation put the restriction in effect July 15, after which date it would be impossible to export to any country of the world, without an export license, coal, coke, fuel oils, kerosene and gasoline, including bunkers, foodgrains, flour and meal therefore, fodder and feeds, meats and fats, pig-iron, steel billets, ship-plates and structural

material, scrap iron and scrap steel, ferro-manganese, fertilizers, arms, ammunition, and explosives. While the restrictions applied to all the world, it was understood to be the intention of the Exports Council to grant licenses freely where it was established beyond a doubt that supplies were not reaching Germany. The restrictions applied chiefly to neutral countries. It had been shown that, notwithstanding

AN AMERICAN LUNCHEON IN LONDON Left to right-the Italian Ambassador, Premier Lloyd George, Ambassador Walter H. Page, Col. H. W. Thornton

the growing scarcity of food products, during May exports of foodstuffs in crude condition and food-animals were valued at $56,424,000 by the Department of Commerce, an increase of about $20,000.000, and exports of foodstuffs partly or wholly manufactured, at $75,184,000, an increase of $13,000,000. During May exports to the Netherlands were valued at $9,670,000, an increase of about $500,000;