Edwin J. Clapp. Economic Aspects of the War. 1915. Contents

ECONOMIC ASPECTS OF THE WAR
NEUTRAL RIGHTS, BELLIGERENT CLAIMS AND AMERICAN COMMERCE IN THE YEARS 1914-1915

EDWIN J. CLAPP
Professor of Economics, New York University

NEW HAVEN: YALE UNIVERSITY PRESS
LONDON: HUMPHREY MILFORD
OXFORD UNIVERSITY PRESS
MDCCCCXV

BY EDWIN J. CLAPP

THE PORT OF HAMBURG (Second Printing) 12mo, CLOTH BINDING, GILT Top, 220 PAGES, 19 ILLUSTRATIONS PRICE $1.50 NET

THE PORT OF BOSTON (IN PREPARATION)

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PREFACE

This story of international lawlessness in the first year of the Great War is the outgrowth of a public lecture given at New York University in March, 1915.

The book was written because it seemed to me that we Americans were paying too much attention to the affairs of belligerents and too little to our own.

After all, we are by no means untouched by the war. It imperils not only our present material interests but also neutral rights upon which the material interests of all peaceful nations in the future depend.

The neutral world is watching for us to realize and assert its rights and ours. Hence this statement of what those rights are and this record of what seems to have occurred to threaten them.

EDWIN J. CLAPP.
University Heights, New York,
August, 1915.

CONTENTS

CHAP. I. RIGHTS OF NEUTRALS UNDER INTERNATIONAL LAW

Elements of the present situation.
.....Nature of international law
.....Its sanctions
.....The necessity for a compulsion
.....War and neutrals. Meaning of "economic war"
Contents of international law
.....Declaration of London
Violations of international law.
.....Mine laying
.........."Modifications" of Declaration of London Orders in Council
...............Changes in contraband list
...............Blockade
Need of return to legal limits now

CHAP. II. THE AUGUST ORDER IN COUNCIL AND ITS EFFECT ON THE EXPORT OF FOODSTUFFS

Our right to ship food to Germany
.....Especially as defined in Declaration of London
Britain's abolition of that right.
.....The August 20 modification of the Declaration of London,
..........Effect on direct trade with Germany
..........Effect on indirect trade with Germany
.....Other measures.
..........Pressure on steamship lines
..........Re-export embargoes of neutrals
..........Netherlands Oversea Trust
Movement of foodstuffs markets.
.....Grain
.....Flour
Our loss not of money but of principle

CHAP. III. FOODSTUFFS UNDER INTERNATIONAL LAW. THE OCTOBER ORDER IN COUNCIL

Our proclamation of our rights, August 15
Precedents in international practice, especially England's
The October Order in Council
.....Retention of harsh features of August Order
.....Forbidding shipments "to order"
..........Effect on strictly neutral trade
Operation of October Order.
.....Case of the four meat steamers
.....Compelling neutrals to place re-export embargoes
.....Trade discouragement through detention policy
Our protest December 26
British answer January 7
.....Intimation of complete ban on our exports

CHAP. IV. THE WILHELMINA. A TEST CASE

Origin and method of the shipment
.....Reception by British public
British measures to stop the cargo.
.....The excuse.
..........German confiscation of grain and flour
.....The action.
..........Grain and flour declared contraband
..........Wilhelmina seized
Disposal of Wilhelmina case.
.....Our note of February 15 and its answer
.....Prize court proceedings
..........New Order in Council
.....Our objection to the handsome settlement

CHAP. V. THE BLOCKADE

Its alleged cause: the German War Zone Decree
.....That Decree
.....Our protest and Germany's answer
Our attempt to reconcile England and Germany
.....Answers of the belligerents
The Blockade.
.....Its announcement
.....Our protest of March 5
.....Britain's answer of March 15
.....Our protest of March 30
.....British answer of July 23

CHAP. VI. SOME EFFECTS AND ASPECTS OF THE BLOCKADE

Effect of the March 23 Order in Council
The meat seizures
.....April 13 prize court proceeding
.....May 21 statement of Foreign Office
..........Statement of packers
.....Negotiations between packers and British
....."Caveat" note of July 15
.....British answer
British control over provisions for neutrals
The solution.
.....Blockade the key to our difficulties
.....The dangerous precedent created
.....The question of our neutrality
Declared stand of two members of British Cabinet

CHAP. VII. STARTING THE COTTON MOVEMENT'.

Introductory.
.....Importance of cotton exports for the South
.....Situation in fall of 1914
The movement to England.
.....Delay in ships and financing
.....Light movement in early months
The movement to Germany.
.....Preponderance of indirect shipments
.....The drop in cotton prices, because of slack German movement
.....Difficulties of exporting.
..........To Germany direct.
...............Vessels of other neutrals
...............Existing American vessels
....................Insurance.
...............Acquired American vessels
....................Dacia
....................Ship purchase bill
..........To Germany indirect.
...............Export embargoes of adjacent neutrals
...............Contraband rumors
.....Solution of the difficulty in German exports.
..........False measures
..........The measure that worked
...............British non-contraband declaration
...............Taking the credit

CHAP. VIII. STOPPING THE COTTON MOVEMENT

Remaining hindrances, even after British declaration.
.....More export embargoes
.....X-raying cotton bales
.....North Sea declared a war zone (mined)
British purchases at low prices
Good effect of German takings on market
Preparation by England to stop the movement to Germany.
.....Contraband talk
.....German War Zone declaration
.....British retaliation planned
The blockade
.....Its March modification
.....Effect of Order on neutral trade
Effect of blockade on cotton prices
Inefficacy of blockade measures, regarding Germany.
.....Effect on ammunition makers
.....Effect on industries
Ill effects of blockade on the South.
.....Past
.....Future
The solution

CHAP. IX. COPPER AS LAWFUL COMMERCE

Introduction.
.....Importance of the export field for our copper
.....Reduction in output at outbreak of war
Large takings of England
Difficulties of shipping to Germany.
.....Copper under the Declaration of London
.....Necessity of shipping via neutrals.
..........Nothing in August
..........Via Holland in September
...............Seizures by England
....................Copper made conditional contraband
...............Violations of law by those seizures.
....................Declaration of London
...................."Continuous voyage" cases
..........August 20 Order in Council
..........Via Italy and Scandinavia in October and November
...............Seizing the copper
...............Copper made absolute contraband
The propriety of ranking copper as contraband.
.....Its immunity under Declaration of London
.....Great Britain's previous position
.....Effect on copper industry

CHAP. X. COPPER AS CONTRABAND OF WAR

Long delays of detained neutral cargoes
.....Sir William Scott thereon
The November British proposal to direct the copper trade
.....Gardner's visit and its failure
Confining neutrals to their average annual quotas
.....Italy's need for more copper than usual
..........England's own example
.....Forbidding neutral shipments "to order"
Our December note of protest
.....Answer from England, on January 7 and February 10
Final surrender of copper trade to Admiralty
.....Italy's copper famine
.....Advantage enjoyed by British dealers
.....American producers sign the Agreement
Efficacy of the "economic pressure" as regards copper
.....Effect on Germany
.....Effect on United States

CHAP. XI. THE EXPORT SITUATION

Growing balance of trade
.....Its direction
Items of large growth in exports
.....The Seven Groups
.....Decrease in other exports
"Spotty" export situation

CHAP. XII. THE IMPORT SITUATION

England's use of her economic power
The commodities affected
.....Rubber
.....Wool
.....Tin

CHAP. XIII. THE IMPORT SITUATION (CONTINUED)

Potash
.....Use. Present status
Dyestuffs
.....Our dependence on Germany
Other imports
Prospective loss of Federal revenue

CHAP. XIV. THE PRACTICABILITY OF STARVING GERMANY

Foodstuffs
.....The fallacy
..........Why it arises
Germany's former measures to remain self-supporting.
.....Tariff protection
.....Intensive agriculture
.....Resulting independent food supply
Germany's present measures
.....Confiscation of grain and flour
..........Bread tickets
.....Treatment of live stock and fodder problems
.....The new harvest
The smuggling trade
Fertilizer
Oil
Possibility of permanent substitution for our products
England's trust in the "attrition policy"
Our need to resume trade with Germany

CHAP. XV. WAR ORDERS AND THE POWER THEY PLACE IN OUR HAND

Importance of artillery in this war
Large orders placed in America
Official approval of State Department
German complaints of these exports
.....Bernstorff on aeroplanes
.....German note of February 16
.....Bernstorff's ammunition memorandum
Our right to ship arms
.....Germany's policy in the past
.....Our obligations under neutrality laws
.....The argument on humane grounds
.....Our material advantage from the orders
Our right to cease these arms exports.
.....Hague Convention supporting it
.....The use of such action:
..........To compel return to the limits of law

APPENDIX

1
President Wilson's Neutrality Appeal

2
British Orders in Council.

a
b
c
d
Order of August 20
Order of October 29
Order of March 11
Order of March 23

3
American note presented jointly to the belligerents in February, suggesting modifications of the severity of war at sea

4
Letter of Jefferson to Pinckney in 1793

5
Minority Report of the Committee on Merchant Marine of the United States Chamber of Commerce

6
Declaration which American Associate Members of Liverpool Cotton Exchange were asked to sign .

7
British detentions of American Copper exports to neutrals, autumn, 1915

8
Copper agreement of United States producers with British Admiralty

9
Statement issued by British Embassy in Washington in May, telling American exporters how to operate

10
Circular letter from United States Trade Advisers sent to American importers

Chapter One

1	President Wilson's Neutrality Appeal
2	British Orders in Council.
a b c d	Order of August 20 Order of October 29 Order of March 11 Order of March 23
3	American note presented jointly to the belligerents in February, suggesting modifications of the severity of war at sea
4	Letter of Jefferson to Pinckney in 1793
5	Minority Report of the Committee on Merchant Marine of the United States Chamber of Commerce
6	Declaration which American Associate Members of Liverpool Cotton Exchange were asked to sign .
7	British detentions of American Copper exports to neutrals, autumn, 1915
8	Copper agreement of United States producers with British Admiralty
9	Statement issued by British Embassy in Washington in May, telling American exporters how to operate
10	Circular letter from United States Trade Advisers sent to American importers