Rationing of Neutrals Blockade

RATIONING OF NEUTRALS (BLOCKADE). The rationing of neutral countries contiguous to the enemy was a new departure, and certainly one of the most momentous and far reaching steps taken in connection with the economic section of the World War. It was also one which, not unnaturally, the United States and the other neutral countries saw in a different light from the British Government.

The British Government, in Aug. 1914, proclaimed that it would abide by the Declaration of London, but it soon became clear that, owing to the exceptional conditions in which the war was being conducted, it would be necessary to apply more vigor ous methods to prevent the enemy procuring what he most needed through neutral countries. When the restriction of enemy's sup plies committee was appointed by Winston Churchill, first lord of the Admiralty, on Aug. 13, 1914, it was allotted the task of watch ing all means or routes by which supplies of food or raw material might reach Germany or Austria, and of recommending by what methods such supplies might be restricted or stopped.

Conditions were such, however, that it soon became evident that pressure by means of a rationing policy must be brought to bear on various neutrals, who were rapidly becoming storehouses for enemy purposes.

The first suggestion of the application of a rationing policy was due to the Restriction of Enemy Supplies Committee which in April 1915 called attention to the extraordinary supplies of almost every kind of commodity that Germany was obtaining through Swedish intermediaries since the beginning of the war. It proposed that since the German attacks on British and neutral shipping with a view to laying siege to the United Kingdom should be effectively countered in accordance with the reprisals policy formally announced on March II, 1915, the Swedish imports should be confined to their normal pre-war proportions having regard to any special circumstances or to any imports that country might lack through failure of supplies from Germany.

For the application of such a rationing, two courses appeared possible (I) that of making arrangements and agreements with responsible bodies in neutral countries for the consignment of imported goods under guarantee, for the purpose of ensuring that such supplies should not be re-exported to the enemy, or (2) rationing by force.

Agreements were made, after prolonged negotiations as follows: The Netherlands Overseas Trust.—By agreement with this body, goods consigned to it were stored in bonded warehouses, and warrants for these goods were held by the banks who guaran teed the N.O.T. contracts. All private buyers having goods con signed to the N.O.T. were required to make a deposit as a guaran tee of good faith, and this was liable to seizure by the N.O.T. in

case of fraudulent practices being discovered. It was the custom of the N.O.T. to review the position of trade at the beginning of each month, first as regarded trade from the Dutch East Indies, and secondly, as regarded other countries. If the N.O.T. consid ered that any import was becoming excessive the trade was stopped and merchants compelled to purchase from accumulated stocks. By the Customs Exportation Restriction Act of June, 1915, further provision was made for the prevention of British goods passing through neutral countries to an enemy destination, the export from the United Kingdom of any goods to Holland, except such as were consigned to the N.O.T., being prohibited. By the Order in Council of June 25, 1915, all free list goods had to go to the N.O.T.

The Societe Suisse de Surveillance Economique.—The proposal to create a responsible body for the control of imports into Switzerland met with violent opposition as being derogatory to Swiss honour; nevertheless, after a long delay and tedious negotiations the S.S.S. was established. The basis of the ration ing policy was that of allowing Switzerland her normal imports after deducting the exports to enemy countries.

Sweden.

Negotiations between the British Government and the Swedish authorities were protracted and on the whole unsat isfactory; it was found impossible to establish an authoritative control on the lines of the Netherlands Overseas Trust, but cotton was made subject to an agreement by which only a certain quan tity was permitted to be exported monthly to Sweden for her home requirements.

Norway.

No actual agreement was made by the British Gov ernment with Norway, though that country was restricted in regard to imports. Legislation was, however, introduced early in 1915, into the storting with a view to preventing goods imported into Norway (under a guarantee against re-export) from being re-exported either by the person who had given the guarantee or by third parties.

Denmark.

It was recognized from the beginning that the geographical position of Denmark caused an exceptionally diffi cult and delicate blockade situation. An agreement was, neverthe less, made by the British Government with a well-organized com mercial body which was known as the Danish Merchants Guild. Goods were only allowed to proceed to Denmark under the guar antee of this dependable guild, and further, the British custom house had full powers to insist, whenever it was deemed desirable, on the production of guarantees and to refuse to allow exports (even of free goods) except when covered by guarantees.

See WAR TRADE ADVISORY COMMITTEE ; BLOCKADE. (L. C. L.)