CHAPTER VI

CONTROL OF EXPORTS

BASIS OF COOPERATION WITH THE ALLIES

The first statement of the general policy the United States as a belligerent was to pursue toward neutral commerce was formulated six weeks after the United States entered the war. In a memorandum of May 17, 1917, the Law Adviser for the Department of State, Mr. L. H. Woolsey, summarized the attitude taken by representatives of the United States in discussions with members of the British War Mission which had come to Washington in April.1

The Law Adviser stated that the cooperation of the United States with the Allies would be "based on the right of the United States to control its exports to any country, neutral or belligerent," for the purposes of (1) conserving supplies for domestic use and for use of the Allies, (2) conserving tonnage for transporting military necessities for the United States and the Allies, and (3) preventing persons in the United States from trading directly or indirectly for the benefit of the enemy. The United States would not assist in "the blockade of neutral countries," nor participate in other measures of the Allies which it had regarded as contrary to international law.

It was explained in this memorandum that the Government was willing to assist in maintaining exports from neutral countries to the United States and the Allies "purely on the ground of conserving its supplies as a domestic measure and of conserving tonnage." The Government was also willing to assist in preventing exports of the United States from reaching the enemy or from being used by neutral countries to replace products which they exported to the enemy. However, it would not carry this policy to the point where neutrals might be forced "into the arms of Germany."

With regard to neutral ships, the Government was unwilling to force them to call at British ports for examination; and it was unwilling to force them into the danger zone in service for the United States or the Allies, further than to insist that neutrals should use their ships to carry their own supplies to and from belligerents. The

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Government was willing to "induce" neutral ships to carry supplies between neutral countries.

Great Britain had "attained the objects set forth above", the Law Adviser stated, through the exercise of belligerent maritime measures. Although the United States considered some of these measures illegal, it was not thereby prevented from controlling exports as a domestic measure, and from attaining through bargaining for the exportation of certain articles, many of the objects attained by Great Britain.

In this memorandum of May 17 the Law Adviser mentioned that, to save tonnage which would be used to transport iron ore from the United States to Great Britain, the United States would restrict exports of coal to Spain unless Spain would export iron ore to Great Britain. Five days later Ambassador Willard in Spain was instructed to inform the Foreign Minister that it might be necessary for the United States to restrict or prohibit the exportation of coal to neutrals. However, if Spain would continue to export iron ore to Great Britain so as to relieve the large exportations of iron and iron products from the United States to Great Britain and her allies, it might "be possible to facilitate the exportation of limited amounts of coal to Spain."

The Law Adviser further explained the position of the United States in a memorandum read to a British representative on May 25. He stated that the acceptance of a British bunkering proposal would not mean that the United States thereby waived the contentions it had previously made in regard to British measures of blockade, rationing, letters of assurance, bunker control, and blacklisting. Furthermore, the United States should not be regarded as "adhering directly or indirectly or by implication to those measures or the grounds upon which they were founded. The action of the United States would be based on its intention, "as a domestic measure," to (1) conserve supplies, (2) economize tonnage, (3) prevent trading for the benefit of the enemy, (4) prevent the carriage of contraband, and (5) prevent supplies from reaching enemy raiders or submarines.

Later, during negotiations with Great Britain for the release of American goods seized while the United States was neutral,* Secretary of State Lansing made clear that the Government could not withdraw from its previously expressed attitude in regard to the British order in council of March 11, 1915.5

2 Document 253.

8 Document 254.

4 Document 370.

B Document 54.

LAW OF JUNE 15, AND PROCLAMATION OF JULY 9, 1917

Shortly after the United States entered the war, a bill was introduced in Congress to prohibit exports except under license. Secretary Lansing cabled the Minister in Denmark on April 20, 1917, that this measure was not intended to "produce burdensome restrictions" upon or interruptions in commerce of the United States with neutral countries except insofar as necessary to prevent trading with the enemy.

President Wilson informed the Netherland Minister at about this same time that the bill introduced did not contemplate the prohibition of exports but simply empowered the President to order a prohibition if necessary. The President stated that only in case of extreme necessity, which was not then foreseen, should he forbid the export of foodstuffs and metal to the Netherlands.

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The bill became a law on June 15. Title VII provided that during the war whenever the President should find that the public safety should "so require," it should be unlawful "to export from or ship from or take out of the United States " any article mentioned in a proclamation, except under regulations prescribed by the President. By an Executive order of June 22 the President established an Exports Council to make recommendations necessary to carry out the purposes of this law. The Exports Council was composed of the Secretary of State, the Secretary of Agriculture, the Secretary of Commerce, and the Food Administrator. In accordance with instructions of the President, the Secretary of Commerce was authorized to grant or refuse export licenses.

The policy of the Government in regard to the control of exports was explained during the latter part of June by the Secretary of State and by the President. Secretary Lansing informed the Swiss Minister that there was no intention to interfere with needed supplies to neutral European countries where measures had been adopted to prevent the reshipment of these supplies to the Central Powers, subject always to the "paramount" needs of the United States and the Allies.10

President Wilson stated on June 26 that there would be no prohibition of exports." Trade would not be arbitrarily interfered with; it would only be "intelligently and systematically directed." The duty of the Government in regard to foodstuffs and like necessaries,

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he stated, was to see that the Allies received a generous proportion of the surplus of the United States. However, it would also be "our wish and purpose" to supply neutral nations as nearly in proportion to their need as was permitted by the amount to be divided. This policy would be carried out by a system of licensing exports, which would be organized and administered "so as to constitute no impediment to the normal flow of commerce."

The first proclamation relating to exports was issued by the President on July 9.12 As public safety required that "succor shall be prevented from reaching the enemy ", the following commodities should not be exported from the United States except under licenses issued by the Secretary of Commerce: coal, coke, fuel oils, kerosene and gasoline, including bunkers; food grains, flour and meal, fodder and feeds, meat and fats; pig iron, steel billets, ship plates and structural shapes, scrap iron and scrap steel; ferromanganese; fertilizers; and arms, ammunition and explosives.

The President announced that in controlling by license the export of these "indispensable commodities," the Government was principally concerned with the "amelioration" of food conditions which had arisen or were likely to arise in the United States before new crops were harvested.13 The duty of the United States in liberating surplus products above domestic needs, he stated, was to consider first the necessities of all nations engaged in war against the Central Powers. The Government also wished and intended to cooperate with neutral nations in their "difficult task of adding from our available surpluses to their own domestic supply and of meeting their pressing necessities or deficits." In considering deficits of food supplies, the Government meant only to assure itself that neutrals were "husbanding their own resources" and that supplies from the United States would not become directly or indirectly available to feed the enemy.

CONDITIONS FOR COMMERCE WITH NEUTRALS

The policy of the United States in regard to commercial relations during the war with Denmark, Norway, Sweden, and the Netherlands was set forth in a memorandum of the Exports Council submitted on July 24, 1917, to representatives of each of these countries.14

The Exports Council stated that obviously the duty of the United States was first to furnish food and supplies to the Allies and for this purpose the American people were "undertaking the utmost

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endeavor and self-sacrifice." They would be willing to increase their efforts in order that supplies might be sent to these four neutral countries. Therefore, to secure arrangements as a safeguard that the sacrifices of the American people shall not have been in vain,” the Exports Council hoped that the following "notes" would receive earnest consideration in each country:

1. Every possible effort should be made to stimulate domestic production of foodstuffs and other commodities, to secure all available supplies from other sources abroad, and to have rigidly regulated consumption.

2. Food resources "should at once be calculated as to their value in protein, fat, and carbohydrates," and consumption should be calculated " upon a standard intake per capita of these fundamental requisites."

3. The possession of commodities was "of the utmost importance in the entire strategy and conduct of the war," and if the American people were to part with supplies to the prejudice of their own interests, this service could not be wholly liquidated by the purchase price. Some service in return of relative value should be furnished the United States or the Allies.

4. "American protein, fat, or carbohydrates or other materials," should not be directly or indirectly exported to Germany.

5. Commodities imported from the United States should not be converted into other commodities exported to Germany or substituted for products which might be exported into Germany. However, the United States would consider any effective means by which products of the neutral countries, derived from sources not American, were "applied to purely humanitarian purposes of adding to the supply for women and children even in the enemy's territory."

6. In order that the United States might cooperate with these countries, the Exports Council desired the following information upon any commodity which it was desired to export: (1) the stock on hand, (2) the amount en route, (3) the amount in the United States owned by them.

7. Pending a mutual arrangement upon the above basis, exports of food to Germany must be reckoned as a depletion of the supplies available to these countries, "and it can not be expected that such depletion will be considered as part of the deficit to be ultimately supplied from the United States."

One week after this memorandum was presented, Acting Secretary of State Polk discussed with British representatives the question of exports from the United States to European neutral countries.15 He pointed out that the United States was about to formulate a policy on the subject but was "embarrassed " by not having authoritative statements on certain important points. The Acting Secretary inquired in regard to agreements of the Allies with neutral countries of Europe, as he felt that the United States should know the pro

15 Document 266.