File No. 763.72112/2824
The Secretary of State to Representative Claude Kitchin
Sir: I have the honor to acknowledge receipt of your letter of August 11, 1916,1 in which you ask for information regarding the [Page 433] so-called British blacklisting of American firms. It is noted that yon desire to use this information in meeting certain statements made in the course of a recent discussion of this subject in the House of Representatives. In order fully to meet your request I have thought it best to submit from facts in possession of the Department the following brief history of the blacklisting measure, which is as follows:
On August 5, 1914, the day following a declaration of war between the German Empire and Great Britain, a proclamation was issued by King George forbidding British subjects to trade with the enemy, and on August 12 an amendment was proclaimed making the first proclamation applicable to Austria-Hungary. A new proclamation was issued on September 11 substituting the first two and defining more fully than was done at first the duties of British subjects during the war in respect of their dealings with the enemy.
The following quotation of paragraph 3 of the proclamation last mentioned will show what the scope of the action then intended by the British Government was:
The expression “enemy” in this proclamation means any person or body of persons of whatever nationality resident or carrying on business in the enemy country, but does not include persons of enemy nationality who are neither resident nor carrying on business in the enemy country. In the case of incorporated bodies, enemy character attaches only to those incorporated in an enemy country.
On October 9 following, another proclamation relating to the subject was issued in which the prohibition of trading with the enemy was extended to enemy branch houses in the “business of insurance or reinsurance” in either British, Allied, or neutral territory.
On June 25, 1915, the provisions of previous proclamations on the subject of trading with the enemy were made to extend as from July 26, 1915, to persons of enemy nationality residing or carrying on business in China, Siam, Persia, or Morocco, in the same manner as applied to persons or bodies of persons residing or carrying on business in enemy country.
The extraordinary powers under which the King was permitted to issue the proclamations described were further extended by an act of Parliament of December 23, 1915, authorizing the issuance of proclamations forbidding trading with persons of “enemy association.” The extended powers thus provided for were exercised by the King in proclamations of February 29 and April 26, 1916, when further lists (statutory lists) of persons of enemy nationality or enemy association with which British subjects were forbidden to trade were proclaimed. A further proclamation consolidating these lists was issued on May 23 following. Paragraph 3 of the proclamation just mentioned contains the following statement further defining the meaning of enemy trading:
For the purposes of this Proclamation a person shall be deemed to have traded with a person or body of persons mentioned in the Statutory List if he enters into any transaction or does any act with, to, on behalf of, or for the benefit of, any such person or body of persons which if entered into or done with, to, on behalf of, or for the benefit of, an enemy would be trading with the enemy, and accordingly Our Proclamation relating to Trading with the Enemy, of the 9th day of September, 1914, as amended by any subsequent Proclamation, shall [Page 434] apply with respect to the persons or bodies of persons mentioned in the Statutory List as if for references in such Proclamations to enemies there were substituted references to the persons and bodies of persons mentioned in the Statutory List. . . .
On July 18 last past, the names of 85 firms and persons established in business in this country were included in the black list. At the same time a consolidated list of all firms and persons previously black-listed was published, this list embracing 1,530 different names of firms in all countries.
The preceding brief history will acquaint you with the subject of blacklisting from the initiation of the practice up to July 18. Immediately following news in this country of the publication of 85 American firms in the black list a number of the firms affected applied to the Department for aid in securing the removal of their names from the black list, and at the same time these were joined by many others not directly interested in urging that the blacklisting measure be strongly protested. The Department has found it proper to inform Great Britain of its serious objection to the measure as affecting the rights and interests of American citizens and the welfare of our commerce, and has also, pending diplomatic discussion of the subject, sought to aid particular firms that have sought to secure the removal of their names from the black list.
Regarding the reported existence of a secondary or confidential black list, to which reference has been made in the press at various times and which is referred to specifically in your letter, I may say that the Department has been unable to find any substantial confirmation of these reports. In fact, it may be said that the British Embassy at this capital has stated in response to unofficial inquiries on the subject that there is no list of proscribed firms other than that known as the “statutory list.”
Especial note has been taken of your question, “Is it true, as charged, that an American who desires to ship goods, contraband or non-contraband, to parties in South America, must first obtain a permit from the British Embassy here in the United States?” and the Department can only say in reply that it has no knowledge of any such practice as you mention. It is understood, however, that shipping companies operating boats to South and Central American ports are refusing to accept cargo offered for shipment to or from blacklisted firms. To complaints made by shippers who have sought the aid of the Department in overcoming difficulties of this kind the Department has invariably replied that it has no power to compel shipping companies to alter their course in discriminating in acceptance of cargo. The Department has no information that it is necessary for shippers to treat with the British authorities in negotiating for cargo space.
I may add that an examination of the so-called confidential black list of firms in Brazil and Argentina transmitted with your letter has been made, with the result that these are found to be identical with the published statutory list for the countries named. These and the other enclosures with your letter are returned herewith.
I have [etc.]
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