Restraint on neutral trade with belligerents rests upon a compromise between two conflicting principles. On the one hand the subjects of a neutral state contend that they are entitled to carry on their normal trade with either belligerent, provided such trade is not directly calculated to prejudice the military operations of one belligerent, nor to promote those of the other. On the other hand a belligerent state claims that the subjects of a neutral state are not entitled to supply his enemy with commodities which are of direct and indirect use to his enemy in the conduct of the war. Between these two contentions there have been great divergencies both in theory and practice. A state is apt to take a different view when belligerent from that which it maintained as a neutral. But upon one matter there is no difference of opinion. It is generally recognized that it is for the belligerent and not for the neutral state to enforce the restraints on neutral trade; that it is the duty of the neutral state to acquiesce in such restraints in so far as they are not unwarrantable ; and that the violation of such restraints by the subjects of a neutral state are not criminal and only involve the perpetrators in the seizure and loss of their prop erty. The most important restraints on neutral trade are those imposed by the rules relating to blockade (q.v.) ; pacific block ade (q.v.) ; contraband (q.v.) ; continuous voyage; convoy (q.v.) ; unneutral service; and visit and search (q.v.).
The doctrine of continuous voyage has been referred to under CONTRABAND (q.v.). It was first ap plied by Lord Stowell to the engagement of neutrals in a trade closed to them in time of peace (The Immanuel, 2 C. Rob. 186 [1799]). In this case a neutral vessel sailing from Hamburg was condemned for carrying food, during the war between Great Britain and France, from Bordeaux to St. Domingo, a French colony. The doctrine was also applied by Lord Stowell in The Yonge Pietor, 4 C. Rob. 79 (18o1), under the rule prohibiting trade with the enemy. In this case the goods were consigned to a neutral port with an ultimate destination by land to an enemy port. This gave rise to the doctrine of "continuous transport." Secondly the doctrine was applied during the American Civil War both to blockade and contraband.
At the Naval Conference (19o8-9) it was found impossible to reach agreement upon the question of the engagement of neu trals in a trade closed to them in time of peace, but the Declara tion of London did deal with the application of the doctrine of continuous voyage to blockade and contraband. By Art. 19 what ever might be the ulterior destination of a vessel or her cargo, she was not liable to capture if at the moment she was on her way to a non-blockaded port, although it was still open to the captor to prove that the alleged destination to a neutral port or open port was merely simulated. But such capture was permissible
only within the area of operations or on a pursuit commenced therefrom. Art. 39 provided that absolute contraband should be liable to capture if shown to be destined to territory belong ing to or occupied by the enemy or to his armed forces.
During the World War the doctrine of continuous voyage and continuous transport was applied by the Allied and Associated Powers to conditional as well as to absolute contraband, and was fully examined by Sir Samuel Evans in the Kim (1918) I.B. and C.P.C. 405. For the French practice, see the Karimata, Fanchille, Jurisprudence Francaise en Mature de Prises Maritimes, 62, 92; for the Italian see S. S. Kyzicos, Fanchille, Jurisprudence Italienne en Mature de Prises Maritimes, 57.
By the law of nations merchantmen must always be brought in for adjudication and consequently must never be destroyed by their captors (the Actaeon [1818] 2 Dods: 48, the Felicity [1819] 2 Dods : 381, and Maisonnaire v. Keating [1815] 2 Gall: 325). The old rule, however, that neutral vessels must never be destroyed, was re jected by Russia in her naval instructions in 1868, 1895 and 1901 ; by France in 187o; by the United States in 1812 and 1898; by Japan in 1904 and by Germany in 1908. Art. 48 of the Declara tion of London provided that "a neutral vessel which has been captured may not be destroyed by the captor but she must be taken into such port as is proper for the determination there of all questions concerning the validity of the prize." But this pro vision is qualified by Art. 49 which declares : "As an exception a neutral vessel which has been captured and which would be liable to condemnation, may be destroyed if the observance of Art. 48 would involve danger to the safety of the warship or to the suc cess of the operations in which she is engaged at the time." By Art. 5o, before destruction, all persons must be placed in safety and the ship's papers taken on board the warship, and by Art. 51 the captor must prove that the destruction was demanded "in the face of exceptional necessity." Upon failure to prove this, the captor was bound to make full compensation, whether the capture was valid or not. It was con tended at the time by some Powers that these guarantees virtually amounted to the renunciation to the right of destruction, but the present writer declared that Art. 49 would lead to piracy. And so it proved in the World War. Under the plea of "danger to the safety of the warship" and of "exceptional necessity," the Ger man Government ordered the officers of submarines to sink enemy and neutral merchantmen alike at sight and without leaving a trace (spurlos versenken). It is estimated that 1,72o neutral vessels were thus destroyed by Germany and her allies, and over 2,000 neutral sailors killed or drowned.