But this defense did not even convince Mr. Balfour. He finally admitted:

"But, after all, it is the equity of the Allies' case rather than the law which mainly interests the thinking public of America and elsewhere."

Again, this is the assumption that Britain is fighting our battle and we must therefore let her do as she pleases in destroying our commerce as a means to attain her end.

If, then, there is no blockade which we can, as neutrals, admit, and none which the first Lord of the Admiralty in the British Cabinet can defend, we turn to another distinguished British statesman to learn what our rights are. It is recalled that, at the time of the Boer War, Lord Salisbury stated that conditional contraband could not be stopped by a belligerent unless shown to be destined to the military of the enemy.

At this point the second member of the British Cabinet, Lord Lansdowne, tells us our further rights in the matter. He tells us that we must not recognize the action of a belligerent (an English) prize court which stops our foodstuffs (to Germany) in violation of the principle Lord Salisbury laid down.

It is remembered that in 1904 Russia seized food destined to the civil population of Japan. Lord Lansdowne, we recall, then Foreign Secretary, wrote a letter to Joseph Choate describing the warning issued to Russia.

"His Majesty's Government further pointed out that the decision of the prize court of the captor in such matters, in order to be binding on neutral states, must be in accordance with the recognized rules and principles of international law and procedure."

That is, Lansdowne seems to say that every one of the hundreds of British seizures of vessels with American cargoes would have been illegal even if they had been destined for Germany. In the Cabinet he must contend that the British seizures of our exports to neutral ports were doubly beyond the pale of all law.

CHAPTER VII

STARTING The Cotton Movement

In the production, ginning and warehousing of the annual cotton crop, direct employment is given to more than four millions of people, and a livelihood to many more. Upon the successful growth and upon the prompt and satisfactory marketing of cotton are dependent all other business interests of the South, and the earning power of thousands of miles of railway. Moreover, since the South depends upon cotton for its ability to purchase other goods, any deficiency in growth, depression of values or interference with marketing means an immediate adverse affect upon agricultural, mercantile and manufacturing activities in the rest of the country.

It happens that successful marketing of the cotton crop depends primarily upon getting it into the export trade. In recent years two-thirds of the cotton crop has been exported and only one-third consumed in this country.

Interference with the foreign movement is thus the most serious evil that can befall the South, far worse than a partial crop failure due, for example, to the boll weevil. If the foreign market is open, high prices are paid for the cotton that escapes a crop failure. The total cotton value is thus often as large

in years of partial crop failure as in years of heavy yield. The twelve million bales of 1910 were worth $100,000,000 more than the 16,250,000 bales of 1911. But if the foreign market or any essential part of it is closed, ruinously low prices greet every participant in the crop. In the midst of apparent plenty, everyone is in want.

Such a result in the South was brought about in the fall of 1914, because of the European War. England, the largest consumer of our cotton, normally takes 3,500,000 bales per year, over one-third of our total cotton exports. Germany and Austria come next and normally take from 2,500,000 to 3,000,000 bales of cotton, nearly one-third of our exports. The war would inevitably have affected the cotton trade adversely. But the effect was accentuated by the threatening attitude of England towards our commerce, which kept the German market for cotton closed until the winter months.

The pressure in the South of those 3,000,000 bales, for which exit was long denied, helped force the price of cotton down to 6 cents per pound. The cost of producing is supposed to average about 8 cents. At this low price of 6 cents, thousands of the little cotton farmers, the rank and file of the South, were forced to part with their product. They had not the financial power to hold the cotton until, along in the spring of 1915, its price rose to 10 cents, owing to a temporary reopening of the path to Germany, the broadening demand of other countries and the activities of our own mills. It was the large

planters, dealers and English importers who were able to hold the cotton and profit from the advance. The farmers were hard hit.

The cotton year starts August 1. About that date begins the export movement of the new crop. In the second half of July, 1914, "spot cotton”that is, cotton for immediate, not future deliverywas selling in New York for 134 cents per pound; on July 27, with war threatening, it was 1214 cents. Two days later, with war certain, this price had dropped to 1134 cents. On July 31 the New York and New Orleans Cotton Exchanges closed.

With the entrance of England into the war on August 4, shipping was paralyzed. Most of our commerce has been carried in British and German ships and no such ship dared venture out to sea because both English and German cruisers were on the North Atlantic. The ordinary marine insurance carried on the hulls and cargoes of these ships did not protect them against the danger of capture or destruction. Against this new peril, war risk insurance was necessary.

The German ships never sailed again, but kept their American ports, being so much tonnage withdrawn from the carrying trade. Some British ships were chartered by their government for war services. The remainder were in a position to sail when, a short time after August 1, the British Government insured against war risk British vessels carrying for the United Kingdom; and when, two weeks after the outbreak of the war, the British Admiralty an