tion whether United States trade with these neutral countries has been SO seriously affected. The only figures as to the total volume of trade that I have seen are those for the exports from New York for the month of November, 1914, and they are as follows, compared with the month of November, 1913:

Exports from New York for November, 1913, and November, 1914, respectively: Denmark, $558,000, $7,101,000; Sweden, $377,000, $2,858,000; Norway, $477,000, $2,318,000; Italy, $2,971,000, $4,781,000; Holland, $4,389,000, $3,960,000.

It is true that there may have been a falling off in cotton exports, as to which New York figures would be no guide, but his Majesty's Government have been most careful not to interfere with cotton, and its place on the free list has been scrupulously maintained.

We do not wish to lay too much stress upon incomplete statistics; the figures above are not put forward as conclusive, and we are prepared to examine any further evidence with regard to the state of trade with these neutral countries, which may point to a different conclusion or show that it is the action of his Majesty's Government in particular and not the existence of a state of war and consequent diminution of purchasing power and shrinkage of trade, which is responsible for adverse effects upon trade with the neutral countries.

That the existence of a state of war on such a scale has had a very adverse effect upon certain great industries, such as cotton, is obvious, but it is submitted that this is due to the general cause of diminished purchasing power of such countries as France, Germany, and the United Kingdom rather than to interference with trade with neutral countries. In the matter of cotton it may be recalled that the British Government gave special assistance through the Liverpool Cotton Exchange to the renewal of transactions in the cotton trade of not only the United Kingdom, but of many neutral countries.

Your Excellency's note refers in particular to the detention of copper. The figures taken from official returns for

the export of copper from the United States for Italy for the months during which the war has been in progress up to the end of the first three weeks of December are as follows:

1913-Fifteen million two hundred and two thousand pounds.

1914-Thirty-six million two hundred and eighty-five thousand pounds.

Norway, Sweden, Denmark, and Switzerland are not shown separately for the whole period in the United States returns, but are included in the heading "Other Europe "; that is, Europe other than the United Kingdom, Russia, France, Belgium, Austria, Germany, Holland, and Italy. The corresponding figures under this heading are as follows:

1913-Seven million two hundred and seventy-one thousand pounds.

1914-Thirty-five million three hundred and forty-seven thousand pounds.

With such figures the presumption is very strong that the bulk of copper consigned to these countries has recently been intended not for their own use, but for that of a belligerent who cannot import it direct. It is therefore an imperative necessity for the safety of this country while it is at war that his Majesty's Government should do all in its power to stop such part of this import of copper as is not genuinely destined for neutral countries.

Your Excellency does not quote any particular shipment of copper to Sweden which has been detained. There are, however, four consignments to Sweden at the present time of copper and aluminium which, though definitely consigned to Sweden, are, according to positive evidence in the possession of his Majesty's Government, definitely destined for Germany.

I cannot believe that, with such figures before them and in such cases as those just mentioned, the Government of the United States would question the propriety of the action of his Majesty's Government in taking suspected cargoes to a prize court, and we are convinced that it cannot be in accord with the wish either of the Government or of the people of the United States to strain the international code in favor of pri

vate interests so as to prevent Great Britain from taking such legitimate means for this purpose as are in her power.

We

With regard to the seizure of foodstuffs, to which your Excellency refers, his Majesty's Government are prepared to admit that foodstuffs should not be detained and put into a prize court without the presumption that they are intended for the armed forces of the enemy or the enemy Government. believe that this rule has been adhered to in practice hitherto, but if the United States Government have instances to the contrary we are prepared to examine them, and it is our present intention to adhere to the rule, though we cannot give an unlimited and unconditional undertaking, in view of the departure by those against whom we are fighting from hitherto accepted rules of civilization and humanity and the uncertainty as to the extent to which such rules may be violated by them in future.

From the 4th of August last to the 3d of January the number of steamships proceeding from the United States for Holland, Denmark, Norway, Sweden, and Italy has been 773. Of these there are 46 which have had consignments of cargoes placed in the prize court, while of the ships themselves only eight have been placed in the prize court, and one of these has since been released.

It is, however, essential under modern conditions that where there is real ground for suspecting the presence of contraband the vessel should be brought into port for examination. In no other way can the right of search be exercised, and but for this practice it would have to be completely abandoned.

Information was received by us that special instructions had been given to ship rubber from the United States under another designation to escape notice, and such cases have occurred in several instances. Only by search in a port can such cases, when suspected, be discovered and proved.

The necessity for examination in a port may also be illustrated by a hypothetical instance connected with cotton, which has not yet occurred. Cotton is

not specifically mentioned in your Excellency's note, but I have seen public statements made in the United States that the attitude of his Majesty's Government with regard to cotton has been ambiguous and thereby responsible for depression in the cotton trade.

There never has been any foundation for this allegation. His Majesty's Government have never put cotton on the list of contraband; they have throughout the war kept it on the free list, and on every occasion when questioned on the point they have stated their intention of adhering to this practice. But information has reached us that, precisely because we have declared our intention of not interfering with cotton, ships carrying cotton will be specially selected to carry concealed contraband, and we have been warned that copper will be concealed in bales of cotton.

Whatever suspicions we have entertained we have not so far made these a ground for detaining any ship carrying cotton, but should we have information giving us real reason to believe in the case of a particular ship that the bales of cotton concealed copper or other contraband the only way to prove our case would be to examine and weigh the bales, a process that could be carried out only by bringing the vessel into a port. In such a case, if examination justifies the action of his Majesty's Government, the case shall be brought before a prize court and dealt with in the ordinary way.

That the decisions of British prize courts hitherto have not been unfavorable to neutrals is evidenced by the decision in the Miramichi case. This case, which was decided against the Crown, laid down that the American shipper was to be paid even when he had sold a cargo, cost, insurance, and freight, and when the risk of loss after the cargo had been shipped did not apply to him at all.

It has further been represented to his Majesty's Government, though this subject is not dealt with in your Excellency's note, that our embargoes on the export of some articles, more especially rubber, have interfered with commercial

interests in the United States. It is, of course, difficult for his Majesty's Government to permit the export of rubber from British dominions to the United States at a time when rubber is essential to belligerent countries for carrying on the war, and when a new trade in exporting rubber from the United States in suspiciously large quantities to neutral countries has actually sprung up since the war.

It would be impossible to permit the export of rubber from Great Britain unless the right of his Majesty's Government were admitted to submit to a prize court cargoes of rubber exported from the United States which they believed to be destined for an enemy country and reasonable latitude of action for this purpose were conceded. But his Majesty's Government have now provisionally come to an arrangement with the rubber exporters in Great Britain which will permit of licenses being given under proper guarantees for the export of rubber to the United States.

We are confronted with the growing danger that neutral countries contiguous to the enemy will become, on a scale hitherto unprecedented, a base of supplies for the armed soldiers of our enemies and for materials for manufacturing armament. The trade figures of imports show how strong this tendency is, but we have no complaint to make of the attitude of the Governments of those countries, which, so far as we are aware, have not departed from proper rules of neutrality. We endeavor in the interest of our own national safety to prevent this danger by intercepting goods really destined for the enemy without interfering with those which are "bona fide" neutral.

Since the outbreak of the war the Government of the United States have changed their previous practice and have prohibited the publication of manifests till thirty days after the departure of vessels from the United States ports. We had no "locus tandi" for complaining of this change and did not complain. But the effect of it must be to increase the difficulty of ascertaining the presence of contraband and to render necessary in the interests of our national safety the examination and detention of more ships than would have been the case if the former practice had continued.

Pending a more detailed reply I would conclude by saying that his Majesty's Government do not desire to contest the general principles of law on which they understand the note of the United States to be based, and desire to restrict their action solely to interferences with contraband destined for the enemy.

His Majesty's Government are prepared, whenever a cargo coming from the United States is detained, to explain the case on which such detention has taken place, and would gladly enter into any arrangement by which mistakes can be avoided and reparation secured promptly, when any injury to the neutral owners of a ship or cargo has been improperly caused, for they are most desirous, in the interest both of the United States and of other neutral countries, that British action should not interfere with the normal importation and use by the neutral countries of goods from the United States.

I have the honor to be, with the highest consideration, your Excellency's most obedient humble servant,

E. GREY.

T

little has been said about Italy's refusal to join Germany and Austria in their war for world power.

During the past five months we have heard German apologists offer the most contradictory arguments to prove, first, that Russia, next, that France and Belgium, and, finally, that England began the struggle. The Kaiser himself, with that disdain of fact which is the privilege of autocrats, declared that the sword was forced into his hands. And all the while the mere abstention of Italy from supporting Germany and Austria gave the lie to the Germanic protestations and excuses.

By the terms of the Triple Alliance every member of it is bound to communicate at once to the other members all international diplomatic transactions

which concern the alliance. Germany and Austria failed to do this during the earlier stages in July, when they were preparing for the war. Only after they had laid their train so surely that an explosion was almost inevitable did they communicate the documents to Italy and call upon her to take her place in the field with them. But Italy refused; because, after examining the evidence, she concluded that Germany and Austria were the aggressors. Now, the terms of the Triple Alliance bind its members to

stand by each other only in case of attack.

Italy's verdict, therefore, threw the guilt of the war on Germany and Austria. She had testimony before her which does not appear even in the "White Papers" and other official diplomatic correspondence; and all the efforts of German zealots and casuists have not subtracted one iota from the meaning of her abstention. Germany and Austria were the aggressors-that is the Italian verdict which history will confirm.

On this side of the water the German apologists made as little as possible of Italy's withdrawal-they were too busy trying to persuade the American public that trivialities like the passage of a French aeroplane or of a French automobile with two French officers in it, across a corner of Belgium, thirty minutes before the German Army invaded Belgium, proved that the French and Belgians began the war. They sneered a little at Italian honor; they implied that scuttling off was all that could be expected of a decadent Latin people; and they hinted that, after the Kaiser had disposed of France, Belgium, England, and Russia, he would punish Italy for her "flight."

At Berlin, however, the importancemilitary, political, and naval-of Italy's

withdrawal from the Triple Alliance was appraised at its true value. The German Foreign Office employed alternately threats and blandishments upon her. They warned her that, if she refused to back up her allies, she would be treated without mercy at the end of hostilities. When the policy of terrorizing failed, seductive promises were held out-suggestions of an addition to Italian territory and of a subsidy for military expenses. These also failed. Italy could not be induced to send her million soldiers against the Allies. Then Germany labored to prevent her from actively joining the allies-and this effort Germany is keeping up at the present moment, under the direction of the sleek Prince von Bülow.

The Italians, who have in large measure a sense of humor, that clarifying quality which Prussianization has destroyed in the Germans, must have smiled when they heard the German envoys expatiate on the beauties of neutrality, and, although they are a polite people, they must have found it hard to keep from laughing when the agents of Dr. Bethmann-Hollweg, who had just declared that a treaty is only a scrap of paper, to be torn up at pleasure, tried to impress upon Italy the sacredness of the treaty which bound her to the Triple Alliance.

Not content with these official, or officious, manoeuvres, the German Government sent Socialist leaders into Italy to urge the Italian Socialists not to consent to a war in behalf of the Allies; but they, too, seem to have met with a chilly reception. The Italian Socialists, like the rest of the world, wondered why it was that 5,000,000 Socialists in Germany should allow themselves to be commandeered, apparently without a murmur, to uphold a war waged to preserve and extend military despotism.

In addition to these direct efforts to win Italy to their side, or at least to keep her from going over to the enemy, the Germans have been busy since early in August with their Press Bureau, which has pursued methods there similar to those they have made us familiar with here. But in Italy they have been more

guarded and less truculent, and they have not, like the preposterous Bernstorff and his associates, assumed that the public they were addressing was not only ignorant of the simplest facts of recent European history, but were also morally imbecile.

Although the Italians are not less susceptible than are other peoples to be swayed by sudden political gusts, they were not at the end of July, 1914, taken by surprise. For a long time past their King and statesmen had deliberated as to what ought to be Italy's course in case Germany should carry out her wellunderstood purpose of humbling England. The Italians were not deceived by the increase from year to year of the German Army. They knew perfectly well what the tremendous efforts of the Germans to create a great navy meant. They had no illusions as to the purpose of the strategic railways to the Belgian frontier on the west or to the Russian border on the east. They knew how narrowly a European war was averted during the Balkan cataclysm two years ago. They did not wrong the Kaiser by supposing that the immense fund which he had recently raised from "voluntary" 5 per cent. contributions on incomes was to be given to The Hague Tribunal to promote the cause of universal peace.

They logically and honorably decided that, if Germany provoked war, Italy would not support her. The bond of the Triple Alliance called for no other action on her part. Germany and Austria provoked the war; Italy stood by her agreement.

But a still further consideration influenced her. It was understood that, if the war in which Germany and Austria engaged should involve England as an enemy, Italy's obligation to support the Triple Alliance would cease. Since it would be suicidal for Italy to accept the liability of a casus foederis which should expose her to attack by the English and French Navies, her participation in the Triple Alliance always carried the proviso that it did not bind her to fight England.

Such is the substance of the statement