TELEGRAM FROM AMBASSADOR PAGE, MARCH 5, 1917 Ambassador Page in Great Britain reported on March 5, 1917, that unless the Allies obtained credit in the United States there would be "almost a cessation of transatlantic trade." 16 He believed that the need was becoming too great to be met by any private financial agency, and inquired whether the American Government "might indirectly, immediately, help the establishment in the United States of a large Franco-British credit without a violation of armed neutrality." During the remaining weeks of the neutrality of the United States, Ambassador Page pressed for a reply to this telegram. However, none was sent. FEDERAL RESERVE BOARD STATEMENT, MARCH 8, 1917 On March 8, 1917, the Federal Reserve Board announced that the statement of November 28, 1916, was not intended to create an unfavorable attitude on the part of American investors toward desirable foreign securities." The Board expressed the belief that banks might advantageously invest a reasonable amount of their resources in foreign securities if this did not interfere with their liquid condition. The Board emphasized the point that "American funds available for investment may, with advantage to the country's foreign trade and the domestic economic situation, be employed in the purchase of such securities." CHAPTER V WAR ZONES, SUBMARINES, AND ARMED MERCHANT SHIPS MINE-LAYING BY BELLIGERENTS, 1914 The German Foreign Office notified the American Embassy at Berlin, on August 7, 1914, that during the war "the necessity will arise, according to prospects, of blockading with mines the points of departure for attacks on the part of hostile fleets against Germany, and the ports of shipment, departing and arriving, of troop transports". The Embassy was requested to inform the Government of the United States of this notice in order that shipping might be warned against entering harbors and roadsteads which might serve as bases for hostile forces. Ambassador Gerard cabled a summary of the German announcement which reached the Department of State on August 9. This summary, which was inaccurate, read as follows: "Foreign Office informs me German ports strewn with mines and requests that shippers be warned in time against navigating in ports which might serve as bases for foreign forces." 1 On August 11, the British Chargé d'Affaires informed Secretary of State Bryan that Germany was "scattering contact mines indiscriminately" in the open waters of the North Sea, and that the British Admiralty held themselves at liberty to adopt similar measures in self-defense. Secretary Bryan replied to the Chargé on August 13.2 The Secretary was "loath to believe" that a signatory to the Hague Convention of 1907 relating to the laying of automatic submarine contact mines, would disregard the provision that mines should become harmless within one hour after being laid. He held that belligerents should prevent their operations from increasing the hazard to neutral ships in the open sea "so far as the exigencies of the war permit". If Germany had endangered neutral commerce by an act which violated the Hague Convention and which could not be justified on the ground of military necessity, he saw no reason for Great Britain's adopting a similar course. Secretary Bryan expressed the hope that the British Government might not feel com 1 Document 5. 2 Document 8. 50 pelled to resort to a method of naval warfare which appeared contrary to the terms of the Hague Convention and which would needlessly menace the ships and lives of neutrals. The British Chargé replied that Great Britain did not hold that the German mine-laying activities violated the Hague Convention, "but that does not make them less dangerous to merchant shipping". Germany stated later that the Hague Convention had not been ratified by Russia and was therefore not binding on any of the belligerents. Great Britain announced on October 2 that German mine-laying and submarine activities made necessary the adoption of counter measures. The British Admiralty stated that it would be "dangerous henceforward" for ships to traverse a delimited area, which extended across the east entrance to the English Channel, and that British ships had been instructed to warn eastbound vessels of the presence of this minefield. In a press release of the following day, the Department of State called attention to the minefield and to the warning which would be given by British ships.3 One month later, November 3, the British Admiralty announced that during the previous week Germany had scattered mines indiscriminately in the North Sea and that the Admiralty felt "it necessary to adopt exceptional measures." They therefore gave notice that the entire North Sea must be considered a "military area within which all ships would be exposed to dangers from mines, which it had been necessary to lay, and from warships searching for suspicious craft. After November 5 all ships entering the area would do so" at their own peril ". The Secretary of State was informed that Norway had protested to Great Britain against this announcement and that Denmark and Sweden would also protest. Norway hoped for the support of the United States, but Secretary Bryan stated on November 10 that the Government did not "see its way at the present time" to join with other governments in protesting to Great Britain." The United States did not make a further statement during 1914 with regard to its position on mine-laying activities of belligerents. In February 1915, Secretary of State Bryan suggested that the belligerents should agree to certain restrictions in the use of mines." In 116 the Department of State held that the "illegal use of mines" had not been confined to any one belligerent; both sides had violated the rights of neutrals and had "sown large areas of the high seas with mines."" * Document 18. GERMAN AREA OF WAR, 1915 The German Government stated in a memorandum of February 4, 1915, that just as Great Britain had designated the waters between Scotland and Norway as an area of war, so Germany now declared as an area of war, the waters surrounding Great Britain and Ireland; that beginning on February 18, Germany would endeavor to destroy every enemy merchant ship found in this area; and that neutral ships should avoid entering this area because, in view of the misuse of neutral flags by the British Government and of the contingencies of naval warfare, they might become victims of torpedoes directed against enemy ships." Secretary of State Bryan considered this declaration in a note of February 10. He reminded the German Government that the sole right of a belligerent in dealing with neutral vessels on the high seas was limited to visit and search, unless a blockade was proclaimed and effectively maintained. The attack and destruction of a vessel entering a prescribed area of the high seas without its belligerent nationality and the contraband character of its cargo being first certainly determined, would be an act "unprecedented in naval warfare". The suspicion that enemy ships were using neutral flags improperly, he stated, could not create a just presumption that all ships traversing a prescribed area were subject to the same suspicion. Secretary Bryan stated that if Germany should act upon the presumption that the American flag was not being used in good faith and should destroy on the high seas an American vessel or the lives of American citizens, the United States would be inclined to consider the act an "indefensible violation" of neutral rights. If this situation should arise, the United States would hold Germany to a "strict accountability " for the act and take any steps necessary to safeguard American lives and property. On this same date representations were made to Great Britain regarding the use of the American flag for the protection of British ships. Secretary Byran stated that according to the German declaration the British Government had explicitly authorized the use of neutral flags on British merchant vessels presumably for the purpose of avoiding recognition by German naval forces. Reserving for future consideration the legality and propriety of the deceptive use of a neutral flag for the purpose of avoiding capture, the Secretary desired to point out that this practice might result in serious consequences to American vessels and American citizens. The occa 'Document 48. Document 49. Document 50. sional use of the flag of a neutral or an enemy under the stress of immediate pursuit and to deceive an approaching enemy, seemed to him different from an explicit sanction by a belligerent government for its merchant ships generally to fly the flag of a neutral power within portions of the high seas presumed to be frequented by hostile warships. The formal declaration of a policy of general misuse of a neutral flag jeopardized " in a peculiar degree" the neutral vessels visiting those waters by raising the presumption that they were of belligerent nationality. In view of Germany's plan to engage in active naval operations in the waters surrounding Great Britian and Ireland, the Secretary would view with "anxious solicitude" any general use of the American flag by British vessels traversing those waters. This practice would greatly endanger American vessels and "would even seem to impose upon the Government of Great Britain a measure of responsibility for the loss of American lives and vessels in case of an attack by a German naval force." Ten days later, February 20, the Secretary of State proposed to the Governments of Great Britain and Germany that they should require their respective merchant vessels not to use neutral flags for the purpose of disguise; that they should not use submarines to attack merchant vessels of any nationality except to enforce the right of visit and search; and that they should agree to certain restrictions with regard to the use of mines.10 These proposals, made in connection with a suggested arrangement for supplying the civil population of Germany with food, were not accepted. THE "FALABA " Ambassador Page in Great Britain cabled on April 1, 1915, that an American citizen was reported to have been drowned when the British ship Falaba was sunk by a German submarine in the zone delimited by the German memorandum of February 4. This case was discussed by Counselor Lansing in a letter of April 2, to Secretary Bryan.11 The Counselor considered unwarranted the sinking of an unresisting vessel without giving those on board adequate time to escape. He held that an American citizen taking passage on a belligerent merchant vessel was "entitled to rely upon an enemy's war vessel conforming to the established rules of visit and search and of protection of non-combatants." However, to enter a complaint on account of the death of an American in this instance would be to denounce the German war zone plan. 10 See p. 16. "Document 61. |