cerned are contraband or there is evidence that, although ostensibly consigned to a person in neutral countries, they are in reality destined to the enemy in contravention of the rules of blockade. The right to submit such cases to the public investigation of a judicial tribunal is one which his Majesty's Government cannot forego, and they feel convinced that the enlightened opinion in the United States cannot adversely criticise their course of action in this respect.

Ninth. It is true that a number of these cases have been pending in the prize court for some time. This is notably the case in regard to certain vessels carrying large shipments of meat and lard ostensibly consigned to Scandinavian ports. The United States Government are, however, no doubt aware that much of the delay involved in these instances is due to the fact that the negotiations have been carried on for many weeks with a representative of the principal American meat packers, for an arrangement designated to limit importation into neutral countries adjacent to Germany, to quantities actually required in those countries for bona fide home consumption. The American meat packers have demanded as a part of the settlement to be agreed upon, that His Majesty's Government should buy the cargoes of several ships now held up in the prize court. Hence the delay in bringing these cases to adjudication.

The negotiations for an amicable settlement have, unfortunately, come to a standstill owing to the exorbitant terms insisted upon by the representative of the American packers. This stage having now been reached His Majesty's Government have decided to go on with the prize court proceedings in these cases, and it is not expected that a decision will be much longer delayed.

Tenth. It may finally be pointed out that repeated complaint, as to injury suffered generally by American trade in consequence of interference due to British naval measures, derives little substance from the published American trade returns. A table of figures taken from these returns and showing the amount of recent American trade with Germany and with neutral countries supplying Germany, is annexed hereto. It certainly tends to disprove any contention that American trade with neutral countries has recently suffered. It will be seen that whereas American exports to Germany and Austria in February, 1915, fell by $21,500,000, as compared with the same month in 1914, American exports to Scandinavia, Holland and Italy rose by the enormous figure of $61,100,000.

Eleventh. Similar figures for the month of March have not yet reached His Majesty's Government, but they have received statistics for that month of the value of exports and imports through New York, as issued by the Collector of the Port, and while pointing out a large increase in the value of exports in 1915, compared with those of 1914, as shown in the tables annexed, they desire especially to call attention to a separate statement indicating the increase in the amount of the export to Scandinavian and Dutch ports of two commodities only bacon and lard. These figures show that as against 1,253 boxes of bacon and 9,816 tierces of lard exported to the ports noted in the above countries in March, 1914, there were exported in March, 1915, 32,222 boxes of bacon and 95,676 tierces of lard.

Twelfth. His Majesty's Government consider that the abnormal increase in supplies imported by neutral countries, as shown in these statistics, alone justifies their assumption as to the ultimate destination of many items in cargoes consigned to one or the other of the

countries in question in the vessels which they have detained, but they would call attention to the fact that it is only when they have believed themselves to be in possession of conclusive evidence of the enemy destination of a cargo that they have seized such a cargo, and that American interests, as for instance in the case of cotton, have received especially sympathetic consideration.

(The New York Times, May 21, 1915.)

No. 48. Statement of the Secretary of State, May 21, 1915, regarding an error in No. 47.

The foreign trade advisers' attention has been called to the statement of the Foreign Office of Great Britain, published in this morning's papers, an extract from which follows:

Fourth. In accepting this scheme, which, it may be noted, applies to shipments of cotton for a neutral destination only, the principal representative of the American interests described it to his Majesty's Ambassador at Washington as conceding all that the American interests could properly ask. It was never suggested that vessels or cargoes with an enemy destination should be allowed to proceed. His Majesty's Government were, moreover, given to understand that the provisions of the arrangements were acceptable to the United States Government."

The plan referred to is the one which was entered into between the cotton shippers of this country and the British Embassy, a portion of which is quoted in the statement of the British Foreign Office.

66

Without discussing at this time the statement that it was never suggested that vessels or cargoes with an enemy destination should be allowed to proceed," the foreign trade advisers, who informally and unofficially represented the cotton shippers in the negotiations which led to the so-called cotton arrangement, state that it was distinctly understood between Sir Arthur Cecil Spring-Rice, the British Ambassador, and Robert F. Rose, the foreign trade adviser conducting this discussion on behalf of the American cotton exporters, that nothing done by the foreign trade advisers should be regarded as official, and that everything done was to be considered as informal and unofficial, and in no way binding the United States Government to any arrangement reached, or be construed as a recognition of the Order in Council to be issued or the Declaration of March 1, which has been issued. This statement was made to the British Ambassador on March 3, when the first conference in the matter was held, was repeated at each subsequent conference, and each time the absolute assurance from the British Ambassador was received that, in acting for the cotton shippers in any way, the foreign trade advisers were to be regarded as not representing the United States Government in any manner.

(The New York Times, May 22, 1915.)

No. 49. Statement of the British Embassy, May 21, 1915, correcting the error in No. 47.

The terms of the arrangement quoted in the British statement as telegraphed were arrived at in London between a private representative of the American cotton interests in London and British officials in London. The reference to the British Ambassador in Paragraph 4 is, therefore, an error.

The arrangement in question formed the subject of conversations between the Ambassador and representatives of the cotton interests in this country. There never was any question of a formal and official understanding between the United States Government and the British Embassy.

(The New York Times, May 22, 1915.)

No. 50. First German note, May 28, 1915, regarding the loss of American lives and the injury to American commerce incidental to the naval warfare.*

The Minister for Foreign Affairs to the American Ambassador. The undersigned has the honor to make the following reply to the note of His Excellency, Mr. James W. Gerard, Ambassador of the United States of America, dated the fifteenth instant, on the subject of the impairment of many American interests by the German submarine war.

The Imperial Government has subjected the statements of the Government of the United States to a careful examination and has the lively wish on its part also to contribute in a convincing and friendly manner to clear up any misunderstandings which may have entered into the relations of the two Governments through the events mentioned by the American Government.

With regard firstly to the cases of the American steamers Cushing and Gulflight, the American Embassy has already been informed that it is far from the German Government to have any intention of ordering attacks by submarines or flyers on neutral vessels in the zone which have not been guilty of any hostile act; on the contrary the most explicit instructions have been repeatedly given the German armed forces to avoid attacking such vessels. If neutral vessels have come to grief through the German submarine war during the past few months by mistake, it is a question of isolated and exceptional cases which are traceable to the misuse of flags by the British Government in connection with carelessness or suspicious actions on the part of the captains of the vessels. In all cases where a neutral vessel through no fault of its own has come to grief through the German_submarine or flyers according to the facts as ascertained by the German Government, this Government has expressed its regret at the unfortunate occurrence and promised indemnification where the facts justified it. The German Government will treat the cases of the American steamers Cushing and Gulflight according to the same principles. An investigation of these cases is in progress. Its results will be communicated to the Embassy shortly. The investigation might, if thought desirable, be supplemented by an International Commission of Inquiry, pursuant to Title Three of The Hague Convention of October 18, 1907, for the pacific settlement of international disputes.

In the case of the sinking of the English steamer Falaba, the commander of the German submarine had the intention of allowing passengers and crew ample opportunity to save themselves.

It was not until the captain disregarded the order to lay to and took to flight, sending up rocket signals for help, that the German commander ordered the crew and passengers by signals and megaphone to leave the ship within 10 minutes. As a matter of fact he *See No. 46.

allowed them 23 minutes and did not fire the torpedo until suspicious steamers were hurrying to the aid of the Falaba.

With regard to the loss of life when the British passenger steamer Lusitania was sunk, the German Government has already expressed its deep regret to the neutral Governments concerned that nationals of those countries lost their lives on that occasion. The Imperial Government must state for the rest the impression that certain important facts most directly connected with the sinking of the Lusitania may have escaped the attention of the Government of the United States. It therefore considers it necessary in the interest of the clear and full understanding aimed at by either Government primarily to convince itself that the reports of the facts which are before the two Governments are complete and in agreement.

The Government of the United States proceeds on the assumption that the Lusitania is to be considered as an ordinary unarmed merchant vessel. The Imperial Government begs in this connection to point out that the Lusitania was one of the largest and fastest English commerce steamers, constructed with Government funds as auxiliary cruisers, and is expressly included in the navy list published by British Admiralty. It is moreover known to the Imperial Government from reliable information furnished by its officials and neutral passengers that for some time practically all the more valuable English merchant vessels have been provided with guns, ammunition and other weapons, and reinforced with a crew specially practiced in manning guns. According to reports at hand here, the Lusitania when she left New York undoubtedly had guns on board which were mounted under decks and masked.

66

The Imperial Government furthermore has the honor to direct the particular attention of the American Government to the fact that the British Admiralty by a secret instruction of February of this year advised the British merchant marine not only to seek protection behind neutral flags and markings, but even when so disguised to attack German submarines by ramming them. High rewards have been offered by the British Government as a special incentive for the destruction of the submarines by merchant vessels, and such rewards have already been paid out. In view of these facts, which are satisfactorily known to it, the Imperial Government is unable to consider English merchant vessels any longer as undefended territory " in the zone of maritime war designated by the Admiralty Staff of the Imperial German navy, the German commanders are consequently no longer in a position to observe the rules of capture otherwise usual and with which they invariably complied before this. Lastly, the Imperial Government must specially point out that on her last trip the Lusitania, as on earlier occasions, had Canadian troops and munitions on board, including no less than 5,400 cases of ammunition destined for the destruction of brave German soldiers who are fulfilling with self-sacrifice and devotion their duty in the service of the Fatherland. The German Government believes that it acts in just self-defence when it seeks to protect the lives of its soldiers by destroying ammunition destined for the enemy with the means of war at its command. The English steamship company must have been aware of the dangers to which passengers on board the Lusitania were exposed under the circumstances. In taking them on board in spite of this the company quite deliberately tried to use the lives of American citizens as protection for the ammunition

carried, and violated the clear provisions of American laws which expressly prohibit, and provide punishment for, the carrying of passengers on ships which have explosives on board. The company thereby wantonly caused the death of so many passengers. According to the express report of the submarine commander concerned, which is further confirmed by all other reports, there can be no doubt that the rapid sinking of the Lusitania was primarily due to the explosion of the cargo of ammunition caused by the torpedo. Otherwise, in all human probability, the passengers of the Lusitania would have been saved.

The Imperial Government holds the facts recited above to be of sufficient importance to recommend them to a careful examination by the American Government. The Imperial Government begs to reserve a final statement of its position with regard to the demands made in connection with the sinking of the Lusitania until a reply is received from the American Government, and believes that it should recall here that it took note with satisfaction of the proposals of good offices submitted by the American Government in Berlin and London with a view to paving the way for a modus vivendi for the conduct of maritime war between Germany and Great Britain. The Imperial Government furnished at that time ample evidence of its good will by its willingness to consider these proposals. The realization of these proposals failed, as is known, on account of their rejection by the Government of Great Britain.

The undersigned requests His Excellency, the Ambassador, to bring the above to the knowledge of the American Government and avails himself of the opportunity to renew, etc. VON JAGOW.

(Dip. Corr.-leaflet.)

No. 51. German note, June 1, 1915, in reference to attacks on the "Gulflight" and the "Cushing."

The Minister for Foreign Affairs to the American Ambassador. Referring to the note of May 28, the undersigned has the honor to inform His Excellency the American (sic) Ambassador of the United States of America, Mr. James W. Gerard, that the examination undertaken on the part of the German Government concerning the American steamers Gulflight and Cushing has led to the following conclusions:

In regard to the attack on the steamer Gulflight, the commander of a German submarine saw on the afternoon of May 1, in the vicinity of the Scilly Islands, a large merchant steamer coming in his direction which was accompanied by two smaller vessels. These latter took such position in relation to the steamer that they formed a regulation safeguard against submarines; moreover, one of them had a wireless apparatus, which is not usual with small vessels. From this it evidently was a case of English convoy vessels. Since such vessels are frequently armed, the submarine could not approach the steamer on the surface of the water without running the danger of destruction. It was, on the other hand, to be assumed that the steamer was of considerable value to the British Government, since it was so guarded. The commander could see no neutral markings on it of any kind—that is, distinctive marks painted on the freeboard recognizable at a distance, such as are now usual on neutral