File No. 763.72112/2726
[Enclosure—Translation]
Memorandum of the Imperial German
Government on England’s Measures Conflicting with
International Law
against Neutral Firms Maintaining Commercial Relations with
Germans
In an act of December 23, 1915, the Government of Great Britain
was authorized to deal with firms located in neutral countries,
because of their hostile nationality or their connections with
the enemy, on the same footing as with the enemy, in accordance
with the rules of the Prohibition of Trade Act. This measure, as
determined more definitely in the executive ordinance of
February 29, 1916, not only signifies a prohibition of the
conclusion of new business engagements with British firms, but
also a far-reaching encroachment upon the well-established
private rights of the undertakings affected; in particular, such
undertakings are subject to the following provisions:
The capital of the firms, which is in England, is
sequestrated, i. e., without permission from the Government
they cannot dispose of same; for example, they may not draw
from their accounts with English banks, or collect
outstanding accounts with English firms or turn these over
to others (Section 6 of Trading with the Enemy Amendment
Act), or transfer securities issued in England (Section 8 of
same act).
[Page 410]
The equivalent value of coupons or other securities which are
due, may be deposited in court at the debtors pleasure
(Section 7 of said act).
According to the opinion of the Chamber of Commerce, every
article of value in their possession in the United Kingdom,
especially every share in English stock companies or other
corporations, even if the certificate is not under control
of the British Government, may be sold forcibly and the
proceeds deposited (Section 4 of Trading with the Enemy
Amendment Act, 1916).
According to British law, as developed in this war, in
contravention of the less rigid practice of former times,
the prohibition of trade as a rule leads to the canceling of
contracts for purchase and delivery by affected parties with
British firms, and such parties may not appear before
British courts in the character of plaintiffs.
The British Government, through a notice in the press which was
evidently published with official sanction, and by an exchange
of notes with the American Embassy in London which was
communicated to Parliament, has endeavored to justify its
encroachments upon the private rights of neutrals—unprecedented
in history—by pretending to merely assume, in a modified way,
the principle of nationality, adopted by the French Government
in the line of trade restrictions, a principle which is alleged
to have been adopted by many neutral countries as the basis for
their attitude in case of war; the British Government has even
gone to the point of holding up her measures as inspired by
consideration of the interests of neutrals. The weakness of this
attempt at justification is obvious.
It is true the French Government, soon after the outbreak of the
war, confiscated the private property of German subjects under
its control, irrespective of their residence, by a prohibitive
trading act, thereby disavowing the principles recognized by
itself shortly prior to the war. But, with a few exceptions,
which have led to diplomatic protests, so far as is known, it
has not gone as far as to lay hands on neutral property. Nor has
any neutral state made known its decision to adopt such a
course, in case of its being involved in war.
The British provisions not only concern Germans living in neutral
countries, but also neutral firms if German capital is in any
way involved, even when they maintain business relations of any
kind with German commercial houses. Moreover, the British
Government has not hesitated to apply the provisions in the
sense that the list of ostracized firms, working entirely or
partly with neutral capital, has already assumed large
proportions and affects many neutral countries. This list
contains especially many neutral joint stock companies, although
according to a generally recognized principle of international
law such companies with individual legal responsibility are to
be considered as subjects of the state in which they were
legally established and as entitled to the full protection of
this state against other powers.
As these encroachments by England on the private rights of the
neutrals who have been placed on the “black list” are unusual
and void of all justification, so is their real effect magnified
by the manner in which the British authorities enforce the law
which exceeds its real authority. By threats of inclusion in
this list, the agents of Great Britain in many neutral countries
bring unprecedented pressure to bear on a great part of the
local commercial world. Whoever refuses to acquaint these agents
with his journals and business secrets, to dismiss German
employees on their demand, or to follow in detail their
directions as to the operation of their business, is threatened
with inclusion in the “black list.” Often this fight against
alleged German influences serves merely as an easily perceptible
mask for arbitrary policies to advance British interests.
The German Government must leave it to the discretion of the
individual neutral governments, how far, by force of vital
reasons, they will submit to British interference, although such
complaisance does not appear to conform to the spirit of true
neutrality. In the light of international law, however, there
can be no doubt that the right of neutrals to maintain peaceable
relations of a commercial and financial nature with subjects of
a belligerent nation may only be restricted by the principles of
maritime prizes, and not in the way of sequestration or official
boycott.
