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(handwritten) Sir E. Carson
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(stamp) MISCELLANEOUS 521 RECORDS
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Printed for the War Cabinet. January 1917.
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CONFIDENTIAL.
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MEMORANDUM IN REGARD TO THE PRESENT POSITION OF
THE
BLOCKADE, JANUARY 1st, 1917.
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| All the evidence available tends to
show that, with some minor exceptions, practically no goods coming
from overseas are getting through to Germany. For this purpose, fish
caught by any of the northern neutrals and landed in a northern country
is regarded rather in the light of home produce than in that of goods
from overseas. The chief minor exceptions are certain colonial goods,
such as tobacco, coffee, and cinchona from the Dutch colonies, and
wines and spirits, as to which we have had a good deal of difficulty
with the French. It is possible that, in addition to these, there
may be some slight leakage by way of Sweden, because we are much hampered
by the Swedish laws in getting information as to the export trade
from Sweden to Germany. With regard to the other three northern neutrals,
we have fairly complete returns, partly official and partly those
furnished to us by our own agents, and these all go to show that practically
none of the export trade from the northern neutrals to Germany consists
of overseas goods. |
| 2. As for Switzerland,
the position is not quite so satisfactory. Italy still sends in to
Germany, through Switzerland, a good deal of fruit, and, until very
recently, and perhaps still, a considerable amount of silk. There
is also a certain amount of trade from Switzerland in goods coming
from other countries which are sent to Austria and Germany in order
to be made up and returned to Switzerland. The Swiss position is difficult
and complicated, because it is under the control of a Committee representing
Italy, France, Russia, and ourselves, and there is a good deal of
bickering between the different nations, which has not improved the
efficiency of the blockade. But on the whole it may be said of Switzerland,
as of the northern neutrals, that the blockade is, apart from the
few Italian exports, practically complete as far as goods originating
outside Switzerland are concerned. |
| 3. This result has
been mainly brought about by the policy of rationing, and an Appendix
(A) shows, with respect to the northern neutrals, how far that policy
has been carried in the more important goods. In the case of Denmark
and Holland, as well as Switzerland, and, to a considerable extent,
in the case of Norway, agreements have been entered into by which
the amounts of imports of military value allowed into those countries
has been limited by agreement, and where this has been done no difficulty
arises. In Sweden, on the other hand, we have only been able to secure
agreements in the case of cotton and lubricating oil. With respect
to all other articles, we have had to ration Sweden by reference to
a figure based on pre-war imports, which we have thought represented
her reasonable home requirements, and the same course has been followed
in the other neutral countries, where no ration has been agreed. This
is quite a satisfactory method of proceeding, in the case of goods
coming from the British Empire, because there we can, without any
difficulty, limit to any amount we think proper the imports into the
neutral countries. But with respect to goods coming from other oversea
neutrals, and principally North and South America, more difficulty
occurs, since we have no right in international law to restrict trade
of that kind, unless we can show that any particular consignment is
destined for Germany. To some extent this difficulty has been got
over, as far as the United States is concerned, by the institution
of what is called the "navicert" system. Under that system
the Embassy at Washington offers to receive applications from any
intending shippers from the United States who wish to know whether
a particular consignment proposed to be sent by any of them to a neutral
country is likely to meet with difficulties in getting through our
patrols. This is a great advantage to the shipper, who is able to
decide whether he will make a shipment before he has engaged shipping
space and entered into the necessary financial arrangements for the
transaction, and it has always been put forward in the United States
from this point of view. But it is also of great advantage to the
blockade, because before the Embassy replies, and grants what are
called letters of assurance to the intending shipper, the Embassy
communicates with London and we are enabled to refuse such letters
if, for any reason, we think the shipment undesirable, including,
of course, the case where the shipment would cause an excess beyond
the ration. The actual method of procedure is that on an application
in respect of a shipment being received by the Embassy, the Embassy
telegraphs it on to the Contraband Department of the Foreign Office.
It is there considered, and if for any reason it is thought undesirable,
the word "Nolo" is telegraphed; if it is all right, the
word used is "Accipe;" and if for any reason further enquiries
are thought necessary, the reply is "Pendens." |
| 4. There are, however,
a good many cases which are not covered by this system, whether because
the American shippers have not availed themselves of it, or because
the shipments come from some South American country. In those cases,
our only plan is to detain the goods as long as possible, and, if
necessary, put them in the Prize Court. The latter expedient has to
be rather carefully employed, because mere excess is no ground for
condemnation. Indeed, there are several cases which are likely to
come into the Court at an early date, in which our only substantial
reason for Prize-Courting the goods has been that they are in excess
of the ration, and we are advised that there is no hope of securing
a successful result in these cases. They mostly arise with regard
to Sweden, for the reasons already explained, and negotiations are
now pending with the Swedish delegates, the main object of which is
to fix by agreement rations for the goods which are more important
from a military point of view. This will involve allowing Sweden to
have the right to import larger quantities than she has had in the
past year, though probably the lack of tonnage will prevent her from
exercising that right. It will also involve certain concessions with
regard to black lists and so on, which are not in themselves very
desirable. But, in view of the great legal difficulties we are in,
and also in view of the immense importance of securing increased transit
to Russia, which Sweden controls, I think it is well worth while to
make an agreement if we can. If we succeed in doing so, then the imports
to all the neutral countries bordering on Germany will be governed
mainly by agreements, and as far as overseas goods are concerned the
blockade should be substantially complete, provided the agreements
are properly enforced. |
| 5. There is, however,
one big gap in the complete blockade of Germany, namely, the import
into that country of the home products of the neighbouring neutrals,
and for some time great efforts have been made to limit, and if possible,
completely stop these imports. The possibility of doing so differs
in each country, and depends upon the special circumstances applicable
to it. In Sweden, the principal normal exports to Germany are iron
ore, wood pulp, bacon, and a certain amount of eggs and butter. I
see very little prospect of being able to interfere substantially
with the iron ore which Sweden digs out of her own soil and carries
across the Baltic to Germany, and in some cases down the coast of
Denmark and Germany to Rotterdam, under conditions which prevent the
fleet from touching it. The only possible way of stopping it would
be to threaten to cut off some other import into Sweden of which we
have complete control. Unfortunately there are not many of such imports.
We were advised that we had a great lever in our coal, but when we
began to limit our exports of coal to Sweden, Germany increased hers,
and though our coal is better that German coal, the difference in
quality was not enough to give us any very substantial means of pressure.
There are other articles, such as jute and wool, which we substantially
control, but we cannot use them to any very great extent, because
Sweden has, on her side, considerable means of pressure upon us. We
use a great deal of her iron ore, and some of her other manufactured
products, such as ball bearings, which are apparently essential for
our munitions. But far more important than even these is the fact
that she controls the transit to Russia, and we receive perpetual
appeals from the Russian Government not to do anything which may imperil
that transit. Till lately, indeed, the Russian Government were very
much afraid of Sweden's intervention in the war. She has some 500,000
troops, who are said to be well trained and well equipped. That danger,
however, has apparently passed, owing largely to the circumstances
of the war, and partly to the admirable diplomatic work done by our
representative Sir Esme Howard. He has had a difficult task, because,
as is well known, a very considerable and very influential section
of Swedish opinion is strongly anti-Russian, and to that extent pro-German,
while the King, owing to his marriage, has the same bias. |
| 6. We have been able
to cut off the butter export by cutting down our import of margarine
materials into Sweden, a branch of trade which we control almost entirely,
so that the Swedes have been forced to eat their own butter. |
| 7. With regard to
bacon, we have no very effective means of dealing with it, but fortunately
the amount is small. |
| 8. As to wood pulp,
the only means of restricting its export is by limiting the import
of sulphur, which is essential for the manufacture of the kind of
wood pulp which is mainly exported to Germany. But,unfortunately,
the Swedes have command of a sufficient quantity of the Norwegian
pyrites to enable them to supply Germany with a considerable quantity
of the pulp in question. I am myself rather sceptical as to this being
a matter of any great importance, though our scientific advisers are
inclined to think that it is only this "chemical wood pulp,"
as it is called, which is convenient for the manufacture of nitro-cellulose,
now that Germany has no more cotton for that purpose. It is, however,
probable that though chemical wood pulp may be the most convenient,
any form of wood pulp would really do, and of course Germany has an
inexhaustible supply of forests from which wood pulp can be made. |
| 9. Norway normally
exports among other things three articles of great importance to Germany,
fish, pyrites, and nickel, and we have made great attempts to cut
off each of these articles from Germany. |
| 10. With regard to
fish, as the Cabinet know, we entered into a very large scheme of
purchase, part of which was that we were given an option on all the
fish caught and landed in Norway after the 18th August last, except
that the Norwegians might export 15 per cent. of it if that quantity
was not caught by the use of any British materials. This agreement
was bitterly resented in Germany, and is thought to be one of the
causes of their attacks on Norwegian shipping. It is unfortunately
true that the Norwegians have not fully carried out the agreement,
and that a certain amount of fish has been wrongfully exported to
Germany. |
| 11. With regard to
pyrites, the Norwegians are unable to manufacture copper suitable
for electrical purposes, and have consequently had to import a large
quantity of copper for their rapidly developing electrical works.
By a series of purchases and other transactions in the United States,
we have the command of the greater part of the world's supply of such
copper, and we have agreed with the Norwegians that they shall not
export any of their native copper, or pyrites containing copper, to
any belligerent country, except in return for an import from that
country of an equal weight of copper, and we further agreed that since
they wanted immediately a large quantity of electrical copper, they
should, before they exported any copper to Germany, give us the option
of taking in return a very large quantity of pyrites containing some
3,000 tons of copper. The result would have been, if the agreement
had been rigidly carried out, to stop altogether the export of pyrites
to Germany, at any rate for some considerable time. But, as a matter
of fact, we have reason to believe that a certain amount of pyrites,
which in the trade is regarded as non-cupreous, containing only 1/2
per cent of copper has been exported to Germany in breach of the agreement.
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| 12. With regard to
nickel, all that we have been able to do is to arrange with the nickel
owners that, in return for a considerable payment, they will limit
their export of nickel to Germany to a comparatively moderate amount. |
| 13. These various
measures have carried our pressure in Norway as far, I think, as it
can be safely carried. The Germans have made great efforts to induce
the Norwegians to break their agreements and, as I have said, there
is some ground for thinking that the agreements have not been perfectly
kept. We are now putting pressure on the Norwegians by cutting off
their coal supply from us, on which they completely depend, to compel
them to carry out their agreements to the full. But we certainly have
reached a point beyond which it would not be, in my judgment, very
safe to go in view of the advice from our military and naval authorities
that it is undesirable that Norway should come into the war on either
side. |
| 14. From Denmark
there have been undoubtedly very large exports to Germany of agricultural
produce. Denmark is, from a military point of view, absolutely at
the mercy of Germany which, with a comparatively small force, could
easily overrun the whole country and carry off all the live stock
and crops, which are of considerable amount. This fact has been made
use of to the full by the Danes, and they have contrived out of their
military weakness to make very large commercial profits. So long as
they were convinced that Germany was going to be victorious it was
almost impossible to do anything with them, though the population
is overwhelmingly anti-German. Recently, however, their temper has
very much changed. Whereas at the beginning of last year and down
to June they were exporting much larger quantities of agricultural
produce to Germany than they did before the war, and much less to
us, they have now, in compliance with repeated remonstrances from
us, greatly modified their attitude. |
| 15. The most recent
figures are shown in Appendix (B). |
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