Our main problem will not be in any way solved by the entrance into the export trade of the vast supplies of ammunition contracted for and now in the course of manufacture. They will go simply to make the rich richer.

CHAPTER XII

THE IMPORT SITUATION

One of the outstanding features of this war is its amazing demonstration of the economic power of England. Once Sir Walter Raleigh said that the nation which controlled the shipping of the world controlled the trade of the world and so the world itself. Sir Walter Raleigh stated the principle; the proof was in the great European War.

England at the outset of the war owned over half the merchant shipping in the world. This she withdrew from all service that might aid her enemies. She controlled the marine insurance business. The withdrawal of English companies from participation in the underwriting of risks on German-American trade was one of the obstacles to the recovery of that trade. The London discount market, through which most of international trade had been financed, was withdrawn from the service of England's enemies.

All this was a legitimate use of British economic power. For a belligerent to forbid trading with the enemy is as old as war itself. But England went further than this. We see uses of her power that strike us as more novel. The British naval power was used so to threaten with starvation the neutral nations of Europe that they agreed not only not to

allow goods to pass through their territories in transit to Germany, but they even agreed not to supply Germany with their own products. Neutral merchants submit their books to English accountants who satisfy themselves that none of the neutral imports are resold into Germany.

Early in the war the British cut the German cable, leaving us largely dependent on British and French cables for communication with northern Europe. When Italy entered the war, our dependence was complete. No message to European neutrals is allowed to reach its destination if the British censor imagines that it refers to a transaction that may be benefiting Germany. Sweden has complained that this exercise of the censor's imagination has seriously impaired her legitimate trade with us. In August, 1915, the packers were in Washington complaining of the cable censorship. They complained that, after creating the Netherlands Oversea Trust and designating it as the sole consignee for our exports to Holland, Britain was refusing to let our cables reach even the Trust.

These cases represent unprecedented interference with the course of neutral trade. And yet Americans do not excite themselves unduly because of what Britain is doing to Denmark or Holland, even though it is our exports which are there being subjected to British supervision.

Another set of cases comes nearer. Some of them are detailed in this chapter. Rubber from the British empire was withheld from the American trade until

Americans signed an agreement not to manufacture rubber goods-from any rubber whatever-for the enemies of England. So with wool. So with tin.

Because of a blockade which we do not recognize, we are cut off from imports from Germany, and we face serious industrial disturbance through the failure of the potash and dyestuffs supply.

We already have seen that the Admiralty forced our copper exporters to place in its hands the direction of our copper trade. The Liverpool Cotton Exchange now apparently blacklists all Americans who do not sign an agreement not to deal with the enemies. of Britain.

It is indicated by Great Britain to the steamship lines carrying our exports that American shipments to neutral countries, if approved by British consuls, are less likely to be detained. Steamship lines refuse to take shipments until they are so approved. British consuls in American ports are engaged in accepting affidavits from American shippers that none of our exports for neutral countries will get through to Germany; though in our official protest to England we assert that for us to accede to the purpose of the ineffective British blockade would be to violate our neutral obligation to trade with both belligerents.

It is impossible to reach this point without feeling that our American sovereignty is involved.

In 1793 E. C. Genet, an agent of the French Government, was operating in this country, France then being at war with Great Britain. Thomas Jefferson wrote to him in June, 1793:

"It is the right of every nation to prohibit acts of sovereignty from being exercised by others within its limits, and the duty of a neutral nation to prohibit such as would injure one of the warring powers."

It is not far from an act of sovereignty when a British consul decides whether we may ship anything contraband, conditional contraband or "free list"-to neutral countries in Europe. When this sort of sovereignty is permitted and is exercised for the purpose of injuring the Germanic Allies, those Germanic Allies might perhaps justly feel they have cause for complaint against us as a neutral nation.

The present chapter and the following are the story of the strange documents we had to sign to get certain necessary imports from the British empire or even from the neutral world, of the stoppage of our imports from Germany and Austria, especially dyestuffs and potash, and of the pending loss to our Federal treasury from the disappearance of custom revenues from German goods.

First with regard to imports that do not come from Germany. The most important of these are rubber, wool and tin. At least part of our supplies of each of these comes from British colonies. Great Britain allows us to get supplies from British colonies only on condition that our manufacturers refuse to ship to Germany either these materials or the products of them. In practice we may not ship raw materials or their products even if the materials do not come from British colonies; even if they come