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preponderance in battle fleets." By the expression “two-Power" battle fleet his lordship meant, and the Imperial Chancellor understood, that the British battle fleet should be equal in power to that of any two European nations.

The Imperial Chancellor, on his part, retorted that "it was absolutely essential to Germany to have a third squadron in full readiness for war,” to which Lord Haldane replied that, admitting the right of each to do as it thought best, Great Britain would need to increase its fleet. Asked if that were necessary “if we had a friendly agreement,” Lord Haldane stated that an agreement would be prejudiced if Germany carried out its program of a third ship every second year, inasmuch as Great Britain would feel itself obliged to lay down two for every German keel.

This remark of Lord Haldane had cut to the quick, and while promising that he would think the matter over, the Imperial Chancellor said that a third squadron was vital, that new ships were necessary for it, and asked if Lord Haldane could find a way out, as “my admirals," to quote the Imperial Chancellor, "are very difficult," to which Lord Haldane replied in kind, “that was an experience which we sometimes found in England also.”

This was a busy day and a not inauspicious beginning. On the day after — the ninth - not only the Admiral of the Navy, von Tirpitz, but the Kaiser, himself, unannounced, made his appearance, and the entire situation was discussed by those in Germany having the final word in matters political and naval.

The tone of the interview was friendly; but Lord Haldane notes a feeling in his diary that he had come to the most difficult part of his task. The utmost he was able to get was, to quote his own words, “The Emperor was so disturbed at the idea that the world would not believe in the reality of the agreement unless the shipbuilding program was modified that he asked what I would suggest.”

The crux of the matter was the unwillingness of the German authorities to change their law of naval construction, and seeing this, Lord Haldane said, in reply to the Emperor's query"what would he suggest," that "he might at least drop out a ship.” To this the Admiral objected and Haldane thereupon made the suggestion "to spread the tempo, and thus reports the progress:

After much talking we got to this, that, as I insisted that they must not inaugurate the agreement by building an additional ship at once, they should put

off building the first ship till 1913, and then should not lay down another till three years after (1916), and not lay down the third till 1919.1

This was the German side of it. Next for the English.

Quite naturally, Admiral von Tirpitz wanted an understanding as to English shipbuilding, and quite naturally stated that the two-Power standard was "a hard one for Germany" and that “Germany could not make any admission about it.” To this Lord Haldane replied, and because of its importance his exact language is quoted:

I said it was not a matter of admission. Germany must be free and we must be free, and we should probably lay down two keels to their one. In this case the initiative was not with us but with them. An idea occurred to all of us on this observation that we should try to avoid defining a standard proportion in the agreement, and that, indeed, we should say nothing at all about shipbuilding in the agreement, but if the political agreement was concluded the Emperor should at once announce to the German public that this entirely new fact modified his desire for the fleet law as originally conceived, and that it should be delayed and spread out to the extent we had discussed. For the rest, each of us would remain masters in our own houses as far as naval matters were concerned.2

The Kaiser was reported by Lord Haldane to have very properly said that the fact of the agreement was "the key to everything." It would need to be put into proper form, and the Kaiser said, according to Haldane, that “the Chancellor would propose to me this afternoon a formula which he had drafted.” Therefore, Haldane was to see the Imperial Chancellor again, and to return home to report the results of his mission to his colleagues.

The question bristled with difficulties, and the Imperial Chancellor said, as quoted by Haldane, that "forces he had to contend with were almost insuperable. Public opinion in Germany expected a new law and the third squadron, and he must have these.” Lord Haldane repeated what he had previously said, that he could not contest Germany's right, and asked, “but why not postpone the shipbuilding for longer and adapt the law accordingly?” In reply the Imperial Chancellor said that the new squadron and the new law were essential; that he would consult the experts as to retardation; and Lord Haldane promised to let him know privately, upon his return, the state of feeling in England about von Tirpitz's proposals.

It will be observed that the Kaiser and his advisers had definite

1 New York Times, June 2, 1918, p. 4.

; Ibid.

notions as to the naval policy to be pursued, apparently because these matters were uppermost in their minds, but that when the question was broached of preserving peace by means of an agreement, they turned to Haldane, apparently because such matters were uppermost in his mind, and not in theirs.

Additional observations on these important negotiations will be made in a future number.

JAMES BROWN SCOTT.

THE GERMAN-SWISS COMMERCIAL AGREEMENT

The right of a neutral to supply a belligerent with commodities, even such as relate to war, is unquestioned. The right of the belligerent in turn to withhold from the neutral what he himself needs or what he can not afford to let pass through the neutral into his enemy's hands, is also unquestioned. Somewhere between these extremes the degree of permissible trade must lie. It is an economic and political question rather than a legal one, and complicated in the present war by the overwhelming superiority of the belligerent to the neutral influence. Now, of all the neutrals, the case of Switzerland is the hardest, because she is an inland state, needing to import coal and iron and foodstuffs, but having no ships and seaports to do it with, completely dependent therefore upon the will of one or other of the warring states which border her.

Early in the war there was no shortage of bread grain, but the raw material problem was apparent to the Swiss Government from the first. Thus the Minister for Foreign Affairs, Herr Hoffmann, in June, 1915, stated his country's point of view: Our industry, extensive and varied as it is, is entirely dependent on the world's markets. It is therefore impossible to close our doors completely to one or other group of belligerents. If our industry is to live, it must be able to re-export into all countries the articles which it has manufactured with the raw materials supplied by one or other of the belligerents.

But the tendency of each set of belligerents was to insist, as far as possible, that what it furnished did not inure to the benefit of its enemy and that some compensation should be made for its sacrifice in letting Switzerland have material which it wanted for itself. An example of the first-mentioned principle was the prohibition of grain exports by the Swiss Government and the adoption after an interval of the

S. S. S., the Swiss Society of Economic Surveillance, patterned after the Dutch Oversea Trust, holding nearly all imports for domestic consumption solely. An example of compensations was the insistence by the German Government that iron and coal would be sent to Switzerland only if a certain amount of foodstuffs were sent by Switzerland in return, and this was to include not only food originating in the country, like cattle and dairy products, but also imports of food and of many other things, such as forage, lubricating oil, cotton and cotton fabrics, imported into Switzerland on German account. Thus, unless cotton (available for explosives) were let pass to Germany, Swiss industries bade fair to be starved by having their coal supply cut off.

The outcome of this controversy was an agreement by which coal to the amount of 253,000 tons was furnished by Germany, with the iron and steel required; German-owned goods in Switzerland were to be held by the government until the end of the war, and foodstuffs were furnished to Switzerland by the Entente Powers. Such was the arrangement until the spring of 1918 when the coal supply was reduced to 200,000 tons. At that time Germany appears to have insisted that no German coal should be used for the manufacture of any articles exported to her enemies. This was changed, however, to a demand that French coal to a minimum of 85,000 tons a month should be supplied by France. France had made this offer, provided no German restrictive conditions were annexed to it, so a temporary deadlock resulted. There was dispute also as to the price of German coal, which was set at $36 a ton. This was slightly reduced with a larger reduction for domestic coal up to 60,000 tons a month.

On May 22, 1918, a German-Swiss economic convention was signed. The French delivery of coal, which was not mentioned in it, was to have nothing to do with German deliveries. The writer has not the text of the convention nor information as to it except for the rather obscure references of the London Times. But the theory which governed seems to have been that, roughly speaking, the coal used in the manufacture of articles for Entente use should be furnished by France; that foodstuffs which the United States, as producer, might furnish, should not be objected to, and that the needed German coal for other purposes than those mentioned should be supplied up to 200,000 tons a month. Considerable food deliveries to Germany were obligatory. This then, or something like it, is the compromise arrived at between the two sets of rights with which this discussion began.

Granting that the neutral may fairly be ground between the upper and the nether millstones of belligerent necessities and animosities, the outcome in this case seems not unfair. But it may be questioned whether Switzerland is satisfied. The price of coal was considered unduly high, and as the Tagwacht of Berne said, none of the belligerents had ever considered Switzerland in any other light than in that of their own interests.

Is there any just guiding principle discoverable in such a problem

as this?

By an obscure yet relentless system of economic bargaining, belligerents try to strike one another through the neutral. They forfeit thereby the neutral good will. They do serious damage to an innocent neighbor whose only fault is one of geographical position. Practically it amounts to an attempt to enlarge the old rule against contraband. Formerly the belligerent hindered the trade in contraband by intercepting it at sea if he could. This was expanded by the doctrine of the indirect voyage. Now he tries to hinder it by threats and trade reprisals. Should blockade be abolished and trade in contraband be made illegal, with the onus of prevention on the neutral, such practices as we have considered would disappear. But short of such a drastic, almost unthinkable, remedy, the writer does not see any guiding principle to apply or any remedy if the neutral or a league of neutrals is not strong enough to insist upon its interests as paramount to belligerent interests.

THEODORE S. WOOLSEY.

PRIVATE PEACE PARLEYS

From time to time statements occur in the press to the effect that a subject of the enemy - acting unofficially, be it said — has broached the question of peace and the terms upon which it might be concluded to an American citizen residing permanently, temporarily, or passing through some neutral country, and from time to time the press informs its readers that an American citizen, Mr. John Doe, Mr. Richard Roe, or some other person known to the law, residing in this country, has discussed questions of peace with a diplomatic agent of a foreign government, or that the American citizen in question has gone abroad to discuss such questions with officials of foreign governments or with unofficial persons, or that, residing in a neutral country, he has entered

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