EDWIN J. CLAPP
ECONOMIC ASPECTS OF THE WAR

CHAPTER IX

COPPER AS LAWFUL COMMERCE

Cotton, as has been seen, is our most important article of export. It is also the one which has suffered chiefly through belligerent activities on the sea. By a coincidence our second largest item of export, copper, is the one to which the second largest measure of interference was allotted.

While the actual monetary loss which befell copper interests (and they suffered heavy losses in the first six months of the war) was not so great as in the case of cotton, such losses as did occur were traceable to violations of international law and the rights of neutral trade, of a character especially flagrant.

Copper, like cotton and petroleum, is a resource conferred upon this country more richly than on any other. In its raw state it is found principally in Michigan, Montana, Arizona and Utah. Of the normal production of 140,000,000 pounds per month at the refineries, mainly at the Atlantic seaboard, about 110,000,000 pounds come from domestic and 30,000,000 pounds from imported ores.

America turns out over half of all the copper produced in the world but consumes only a third of the world's output. Over half our product has been exported in recent years. This means that of the growing number of our citizens employed in copper mining and smelting, about 70,000 in all, over half are normally working to supply foreign markets.

The principal foreign taker of our copper is Germany. This is due to the development of the German industry in manufactured copper, ranking second only to our own. Normally, exports to Germany move both directly and via Rotterdam. The copper consumption of the Netherlands itself is not large. Practically all of the heavy Dutch takings, usually nearly equal to the direct shipments to Germany, may be considered as destined for Germany.

Our shipments to Germany and Holland---that is, our exports to Germany---have amounted in recent years to one-half our entire exports of copper, or one-quarter of our entire production. There were indeed great interests affected by the British measures which for three months hindered the movement of copper to Germany while it was a free good of commerce or as conditional contraband, and eventually made it absolute contraband, subject to the same summary treatment as guns or shrapnel.

Immediately after the outbreak of war the copper producers, excepting in the Lake Superior region, reduced their output to 50 per cent of normal. No one knew what was to be the effect of the war upon our exports. Of the current output, just before the war began, two-thirds had been going abroad and only one-third absorbed by the slack home consumption.

On August 1, 1914, the refineries had on hand a stock of 100,000,000 pounds. Copper before the outbreak of the war was selling for thirteen cents per pound, which for the majority of mines allows a very small margin of profit. The price started to decline immediately, in August. With copper below thirteen cents, the cheapest place to store what cannot be sold is in the ground.

The reduction to 50 per cent of normal output, designed as an emergency measure, was destined, through the force of events, to carry beyond the New Year.

Copper exports to Germany being so important to the copper industries, we had from the beginning a vital interest in the manner in which copper shipments were treated by England, the belligerent power which controlled the seas. Upon that treatment depended the possibility of continuing the German trade. As in the case of cotton, copper during the first week of August could be shipped nowhere, for financial reasons and lack of marine tonnage. Because of the unsettlement of the foreign exchanges as a means of making international payments, shippers would export their copper only on the terms of "cash against shipper's documents in New York." This method of payment was such an innovation that it was some time before foreign buyers could make the necessary arrangements with the New York banks.

With this difficulty overcome, as it was in a short time, shipments of copper should have gone forward to all nations of Europe with the same freedom as to England. Nothing in the international law code by which England was acting, namely, her modified Declaration of London, permitted the preventing of copper shipments to Germany.

In August, 1914, England took twice as much of copper as in August of the previous year---24,600,000 pounds, against 12,100,000 pounds. In August, 1913, the shipments to Austria, Germany and Holland---the total German takings---were 44,300,000 pounds. In August, 1914, not a pound of copper moved to Germany or Austria; and only 5,350,000 pounds to Holland, compared with 14,200,000 pounds in August of the year before.

To appreciate the situation fully, it is necessary to consider the status of copper as defined by the Declaration of London. We recall that in an Order in Council of August 20, England announced the Declaration of London as her code of naval warfare, making certain important modifications. Therefore, it is to this Declaration that we must look to find the treatment that copper might reasonably have expected from the British authorities. Since copper was not named as either contraband or conditional contraband in the British contraband list of August 4, accompanying the August 20 Order, it technically remained a free article of commerce, transportable direct to Germany undisturbed, in all but German ships. Still less could there be interference with shipments to Germany via adjacent neutrals.

At the outbreak of war direct shipments of copper to Germany were impossible, since, as is recalled from Chapter VII, no vessels reached Germany from the United States until 1915. However, copper should have moved to Germany indirectly through Italy, Holland and Scandinavia.

In August the British agents in this country could report that no copper was going to Germany directly and apparently none by the indirect route. There were no exports declared for Germany, while the copper shipped to the adjacent neutrals was only 7,200,000 pounds compared with 29,200,000 pounds in August, 1913. The neutrals were getting only one-quarter of their normal takings; they were obviously not receiving a surplus which could be sent forward into Germany.

In September, however, the situation changed. Our copper exports to Holland and Italy reached normal, while those to Scandinavia jumped to six times their volume in September, 1913.(20) That the excess was all destined for Germany was by no means a necessary inference, as will be shown. But German destination was a possible construction to be put upon those excess shipments.

American copper interests regarded this development with satisfaction. They seemed likely to regain their market on the Continent, just as they had already more than regained the English market, closed in the first few days of the war.

But the British Government looked at the situation with anything but pleasure. England, of course, did not wait until the tardy American government statistics were published, to get news of the destination of our copper exports. These facts were ascertained by British agents from the ships' manifests, filed at the American Custom House, and were promptly cabled home.

Though in the September statistics given, the increase in copper exports was greatest in the case of "Other Europe" (Scandinavia), yet the largest amount actually moving into Germany was probably via Holland. Therefore the British Government set out to make Holland an example which should be heeded by other adjacent neutrals.

The September measures of England were confined to Holland alone. These measures were four in number.

(1) Dutch dealers were induced to sell to the British Government the stocks of copper in Dutch warehouses, about 2,400 tons.

(2) Holland was induced to enact an embargo forbidding the re-exportation of copper that entered her borders.

(3) The Holland-American Line, which has the only important regular line steamers that operate between America and Holland, was induced to refuse copper shipments consigned to individuals in Holland. It was required that such shipments be consigned to the Dutch Government.

(4) As an extra precaution, England made sure that the Holland-American Line knew what was meant.

On September 21, while 1,500 tons of copper were afloat for Holland on the steamship Rotterdam and 389 tons on the steamship Sloterdyk, the British Government made copper conditional contraband. At the time, this looked like a comparatively harmless proceeding. Neutrals had not yet learned what it meant for a commodity to be on the British conditional contraband list. On the same September 21 the Westerdyk sailed for Holland with 605 tons of copper in her cargo, and on the day following the Potsdam went out with 1,805 tons. These were all Holland-American steamers.

When these vessels reached the English Channel, Great Britain halted every one of them, took them into British ports, and detained them each several days while their copper was being discharged. This was no trifling matter to the vessels' owners. Great steamships make money only when in operation. One day's detention for a vessel like the Potsdam or the Rotterdam means a loss of $2,000. These September and October seizures of the Holland-American boats were sufficient. The company learned its lesson, and never needed to be taught again.

From these four ships England took a total of 9,500,000 pounds of copper.

These seizures could be justified by no known rule of international law. So long as copper was a free article of commerce, of course there was no excuse for interfering with it on its course to Germany, even directly. Even after copper bad been declared conditional contraband, there was as little excuse for seizing it when destined to Germany via Rotterdam. The Declaration of London, Article 35, provided that

"Conditional contraband is not liable to capture, except when found on board a vessel bound for territory belonging to or occupied by the enemy, or for the armed forces of the enemy, and when it is not to be discharged in an intervening port."

That is, when conditional contraband for the enemy is to be discharged in an intervening port, such as Rotterdam, it is not subject to interference. Nor is there any precedent in international law---for example, in cases where treatment of conditional contraband has come before the courts---to justify the stoppage of such traffic to a belligerent via neutral ports.

In defense of the stringent British policy of interfering with supplies for Germany via adjacent neutrals Great Britain's second note (of February 10) in answer to our protest of December 26, dwelt upon the principle of "continuous voyage" as applied to shipments into the Confederacy during the Civil War, in our so-called Bermuda cases.

During that war it was found that the Confederacy was drawing large quantities of supplies from the island of Nassau, in Bermuda. It appeared that British vessels were carrying these supplies to Bermuda, where the cargoes were transhipped. From Bermuda small blockade runners waited their chance to slip through the cordon of Federal warships before the southern ports. Warships of the United States then intercepted British vessels bound to Nassau and brought them before our prize courts, where all their Confederate supplies were condemned, on the ground that the ultimate and not the immediate destination was the controlling factor. That is, to those Confederate goods was applied the doctrine of "continuous voyage," previously developed in British courts.

But it is to be noted that these cases referred not primarily to the application of contraband law with the seas open, but to a condition of blockade and attempted violations thereof. And in September and October of 1914 there was no British blockade of Germany, even on paper.(21) Nor were the captured goods destined to be forwarded to Germany by sea. They were going forward by land.

This fact---that the traffic was to continue to Germany by land---turned our Civil War precedents against Britain. In the same British note of February 10 mention was made of the Matamoros cases, also of Civil War time. The Federal war vessels held up British goods destined for Texas via Matamoros, Mexico, on the Mexican bank of the Rio Grande. Brownsville, opposite Matamoros, was blockaded by the Federal fleet; Matamoros obviously was not. Our Supreme Court decided that we might seize only the contraband on board such ships, and then only if it had a clear destination for belligerent use. That is, absolute contraband destined overland to the Confederacy was condemned, but all other goods with the same destination were ordered released.

None of the copper seized from Dutch boats, while traveling to Germany via Rotterdam, was seizable under these precedents. Copper was not declared absolute contraband until October 29.

For America to have interfered to greater extent than described with the lawful traffic between England and Matamoros would have been intolerable, and would never have been suffered by Great Britain. To be sure, the limitation imposed seriously impaired the tightness of our blockade of the Confederacy. But we had something other than our own wishes to consider. As the Supreme Court said:

"Neutral trade(22) to and from a blockaded country by inland navigation or transportation is lawful and therefore that trade, between London and Matamoros, with intent to supply goods for Texas from Matamoros, violated no blockade, and cannot be declared unlawful. Such trade . . . with unrestricted inland commerce between such ports and the enemy's territory, impairs undoubtedly, and very seriously impairs, the value of a blockade of the enemy's coast. But in cases such as that now in judgment we administer the public law of nations and are not at liberty to inquire what is for the particular advantage of our own or another country."

England in September and October was not maintaining a blockade of Germany. Even had she maintained one, the American "continuous voyage" cases, which she calls to her aid, would, if they had any application at all, declare illegal the seizure of 4,290 tons of copper from the Dutch boats. And this was true quite apart from the further question as to a retroactive decree causing the condemnation of a free article of commerce by declaring it conditional contraband after it has set out upon its voyage on the high seas. The Sloterdyk and the Rotterdam were over halfway across the Atlantic when anathema fell upon their copper cargoes.

It must not be supposed that the injury to this country was in any way measured by the 4,290 tons of copper illegally seized. That copper was eventually paid for by the British Government. But Dutch consignees, and those whom they represented, sent in no more orders. No one continues to order what he cannot get. The purchase by Great Britain of 9,500,000 pounds of copper, for which payment was made after a long delay, was a poor substitute for the cancelled normal trade of 12,000,000 pounds monthly with Dutch ports. The magnanimous action of His Majesty's Government in finally paying for the copper it seized did not support the men and families in Butte and Ray whose markets and whose ultimate employers were by that seizure obliterated.

Great Britain in the September seizures did not act without law. However, what she acted under was not international law, but her own substitute for it; namely, the August 20 Order in Council.

In that Order, we recall, His Majesty's Government repudiated the principle which its own precedents had done the most to create; namely, that conditional contraband moving to the enemy territory is immune unless the captor can prove that it is destined for the enemy's hostile forces. The August Order made conditional contraband seizable when moving to anyone under control of the authorities of the enemy state; which obviously banned all such traffic going to Germany.

Yet this would not have affected the copper seized. It was moving to Germany through Holland, and was to be discharged in "an intervening port," which, according to the Declaration of London, freed it from suspicion as to its possible destination for German forces. The Order in Council made conditional contraband for Germany by indirect routes capturable under the same condition as if it moved direct. In plain words, it was capturable if it moved at all. Under this "law" the Dutch shipments described were seized.

We have seen that in September measures were taken by England to put an end to the movement of copper through Holland to Germany. In October and November came the turn of Italy and the Scandinavian countries to learn that they too must not play the middlemen for German buyers. British representatives in this country could report that in October a quantity of copper far in excess of October, 1913, was exported from the United States towards the neutral countries in question.

EXPORTS OF COPPER TO NEUTRAL COUNTRIES ADJACENT TO GERMANY
COMPARISON FOR OCTOBER 1913 AND 1914

Country	Oct. 1913 Lbs.	Oct. 1914 Lbs.	Increase in Oct. 1914 Lbs.
Holland	11,119,819	------------	11,119,819 (decrease)
Italy	3,698,042	22,166,413	18,468,371
"Other Europe"	1,939,327	13,670,445	11,731,118
Total	16,757,188	35,836,858	19,079,670

It is noted that in October Holland did not receive a pound of copper. That country had been disposed of as a possible purveyor to Germany. The Dutch had learned their lesson. The Holland-American Line would accept no more copper for carriage.

Still more drastic measures were adopted toward Italy and Scandinavia in October, November and December. In October and November, fourteen steamers for Italy were detained and their 21,403,200 pounds of copper piled high at Gibraltar.(23) In November and December, thirteen ships for Sweden were stopped by England and 12,555,200 pounds of copper taken off.(23) The Swedish copper lay in British east coast ports.

Every pound of copper with neutral destination seized before October 29, the date of declaring copper absolute contraband, was seized illegally. The legality of such action as to shipments that were already on the seas on October 29 is doubtful, even assuming that copper may properly be declared absolute contraband.

England herself had appeared to feel technically justified in her September and early October seizures of Dutch-bound copper while it was still conditional contraband. But the seizures of Swedish and Italian consignments promised to assume so vast a scale that the flimsy structure of the August 20 Order in Council and the September 21 contraband list did not look able to bear them. Moreover, the United States on October 22 addressed to England a protest, never published, on its interference with our commerce. So on October 29 copper was made absolute contraband.

The justice of considering raw copper as contraband is a subject worth considering. The British Government by its Order in Council of August 20 had accepted the Declaration of London as binding, precisely as though it had been ratified by His Majesty, except for certain modifications. That Declaration gives no authority for considering raw copper contraband. The items mentioned by Article 22 in the first class (as always subject to treatment as contraband) are all manufactured goods. They do not include materials for ammunition.

According to Article 23, this list could be increased by proclamation of a belligerent so as to include "such articles exclusively used for war as are not enumerated among the eleven groups of the first class." The protocol of the drafting committee indicates that this addition was to care for possible future inventions or discoveries. The committee admitted that it had specifically included in the contraband list all known items that properly belonged there. Raw copper was of course known, and it was not included.

When not a belligerent, His Majesty's Government has demanded more emphatically than any other that the contraband list should be restricted in war time to the narrowest possible limits. Great Britain has even appeared before the international public favoring the total abolition of contraband lists. Witness the charge of Sir Edward Grey to the British Delegation to the Second Peace Conference at The Hague:

"His Majesty's Government recognize to the full the desirability of freeing neutral commerce to the utmost extent possible from interference by belligerent powers, and they are ready and willing for their part, in lieu of endeavoring to frame new and more satisfactory rules for the prevention of contraband trade in the future, to abandon the principle of contraband of war altogether, thus allowing the oversea trade in neutral vessels between belligerents on the one hand and neutrals on the other to continue during war without any restriction, subject only to its exclusion by blockade from an enemy's port. They are convinced that not only the interest of Great Britain, but the common interest of all nations will be found, on an unbiased examination of the subject, to be served by the adoption of the course suggested.

"In the event of the proposal not being favorably received, an endeavor should be made to frame a list of the articles that are to be regarded as contraband. Your efforts should then be directed to restricting that definition within the narrowest possible limits and upon lines which have the point of practical extinction as their ultimate aim.

"If a definite list of contraband cannot be secured, you should support, and, if necessary, propose regulations intended to insure that nations shall publish, during peace, the list of articles they will regard as contraband during war, and that no change shall be made in the list on the outbreak of or during hostilities.(24)

"A list might be prepared and submitted for adoption by the Conference, specifying the articles which in no event shall fall within the enumeration of contraband, e.g., mails, foodstuffs destined for places other than beleaguered fortresses, and any raw materials required for the purposes of peaceful industry. It is essential to the interest of Great Britain that every effective measure necessary to protect the importation of food supplies and raw materials for peaceful industries should be accompanied by all the sanctions which the law of nations can supply.

"His Majesty's Government would further be glad to see the right of search limited in every practicable way, e.g., by the adoption of a system of consular certificates declaring the absence of contraband from the cargo, and by the exemption of passenger and mail steamers upon defined routes, etc."

Obviously the British Government, when it prepares for the eventuality of being a neutral in war time, is no believer in an extended contraband list.

If, as Sir William Ramsay tells us, copper is less properly considered as contraband than cotton is, there is indeed little excuse for declaring it contraband of war.

On December 26 we sent England a note protesting primarily against her seizures of copper on the high seas. It contained only the following reference to the inclusion of copper in the absolute contraband list:

"The government of the United States does not intend at this time to discuss the propriety of including certain articles in the list of absolute and conditional contraband, which have been proclaimed by His Majesty. Open to objection as some of these seem to this government, the chief ground of the present complaint is the treatment of cargoes of both classes of articles when bound to neutral ports."

But it was hardly to be expected that our authorities while accepting the listing of rubber and hides as conditional and absolute contraband, respectively, would protest strongly against the inclusion of copper in the absolute list. Copper has a secondary connection with the operations of war. But both rubber and hides are so distantly removed from war's uses that they are on the free list of the Declaration of London.

Had copper been kept off the absolute contraband list (it was off the first three months of the war), and if conditional contraband had been treated by Britain as in previous wars, the nearly 35,000 workmen in American copper industries laid off on August 1 would have soon returned. As it was, these men were out of work until after the first of the year. Not until April, 1915, were the mines and refineries working to 75 per cent of their capacity. Not until June were they fully employed, ten months after the layoff on August 1. Senator Walsh of Montana declared in the Senate at the end of December:

"Multitudes of the latter (the miners) in enforced idleness must make such provision as they can against the rigors of an inhospitable winter climate. No little destitution must follow, and great industrial loss."

Nor did the loss fall entirely on the workmen. The Order in Council of August 20 cost the copper export trade $6,000,000 per month, the average exports to Germany.

Yet in the early part of the war our main complaint is not with Britain's declaring copper absolute contraband. Up to October 29, 1914, the period with which this chapter has dealt, we protest against the illegal treatment of copper while Great Britain still carried it on her free or conditional contraband lists.

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CHAPTER X

COPPER AS CONTRABAND OF WAR

In the preceding chapter the propriety of Britain's declaring copper absolute contraband of war was discussed. Once that declaration was made, on October 29, and once it was accepted, the British Government had the right to prevent copper from moving to Germany direct or via the adjacent European neutrals.

After October 29 America's chief trials and losses sprang from the extraordinary severity with which England proceeded against trade with neutrals. In its eagerness to intercept all such trade which might by any chance get through to Germany, Great Britain went far towards making impossible even bona fide shipments to neutrals. The severe measures which England took included the imposition on neutrals of re-export embargoes, the subjection of detained neutral shipments to unprecedented delays in the prize court, and finally the stoppage of our neutral copper trade until we submitted it to the complete direction of the British Admiralty.

The other neutrals early followed the example of Holland in prohibiting the export of copper from their boundaries. The State Department at Washington, as soon as the September copper seizures began, co-operated in the attempt to induce European neutrals to lay these embargoes. On October 5 the following Associated Press despatch was sent from Washington:

"Secretary Bryan at once set to work to obtain from Holland, Italy, Spain, Norway, Sweden and Switzerland guarantees that copper imported from the United States would not be re-exported. These guarantees will be accepted by Great Britain. It is believed the neutral countries will not hesitate to approve the plan, which is similar to that already arranged with Holland with regard to foodstuffs."

Yet even with these embargoes in existence, neutral trade was difficult to carry on. It is recalled that, according to the August Order in Council, ultimate German destination of a consignment to a European neutral would be presumed "from any sufficient evidence" and that it then devolved upon the neutral consignee to prove that the shipment was not going to Germany. The difficulty lay in knowing what proof of innocence would be satisfactory.

For example, it was insisted by the copper trade that all of the copper seized at Gibraltar in October and November was destined for Italian consumption. The shipments were from the largest and most responsible firms in this country, such as the American Smelting and Refining Company, the United Metals Selling Company, and the American Metal Company. The consignees were the largest and most responsible consumers in Italy, such as Corradini, Naples; Schiapparelli, Turin; Unione, Genoa; Trafilire and the Metallurgica, Leghorn. Moreover, for any of these dealers to have re-forwarded copper to Germany would have been in violation of an Italian law, especially enacted to prevent such occurrences.

Yet cargoes unloaded and detained on suspicion---like the 9,500 tons at Gibraltar---lay for indefinite periods without action of a British prize court and without any indication of what was to become of them. The first of this Italian copper was taken off at Gibraltar on October 26, the last on November 18. Through December, January and February and into March these cargoes waited, unapproached by any prize court proceedings. Long before, the drafts which our exporters drew against these exports had been returned to them and had caused them financial embarrassment.

Fortunately, we have the opinion of the great English jurist, Sir William Scott, with regard to the propriety of these leisurely proceedings. In giving judgment on the Madonna del Burso, seized in the last months of 1797, he severely condemns a three months' delay in disposing of the case.

"It would be highly injurious to the commerce of other countries and disgraceful to the jurisprudence of our own if any persons, commissioned or noncommissioned, could lay their hands upon valuable foreign ships and cargoes in our harbors, and keep their hands upon them, without bringing such an act to judicial notice in any manner for the space of three or four months. The complaints which such a conduct tolerated by this country would provoke against it from foreign countries are not to be described; and it is not very easy to suggest how the real honor of the country, connected as it is with its justice, could be defended against such complaints."

Further, the eminent jurist lays down the principle that a belligerent nation which is in the exercise of the rights of war is bound to find tribunals for the exercise of such rights, where neutrals should enjoy speedy and unobstructed justice. He dismisses the plea that the "court's full calendar precludes rapid trial," with the words:

"It is no secret that this court has never thought it a breach of that equal justice which it owes to all suitors to suffer a cause to be interposed that from its magnitude of interests or other circumstance of just weight had a peculiar claim to pre-audience."

In point of fact the copper at Gibraltar never came before His Majesty's prize courts. It was eventually bought by the British Government on March 18, 1915, four months to a day after the last consignment of it had been seized, and nearly five months after the first consignment had been captured. Before that, the British Admiralty had offered to buy it, but---a rather important detail---at less than the cost of producing copper. The offer was thus described by an American copper official in an interview in the Boston News Bureau of November 30:

"The British Government not only blocks our mining companies from the Italian market, but, after having seized their copper, they open negotiations to buy it and intimate that they are prepared to pay for it a price that will net the shipper about 10 1/2 cents a pound, less than the average cost of producing copper at the present time."

However, on March 17, the copper men in this country were informed that their representative had made an arrangement with the British Admiralty. The Admiralty agreed to have 1,000 tons of the copper that was held at Gibraltar sold on the London market. The rest the Admiralty was to take at an agreed price, excepting for forty tons carried on the Ascot, which was still regarded as suspicious. The Americans were to pay the expense of transporting the copper to London on a British government collier.

During the first half of November, the copper exporters were desperate. Domestic consumption of copper was at a low ebb. Steamship lines to European neutrals were refusing to accept it for export upon any condition. The British Government was finding one excuse after the other for detention of such shipments; there seemed no possibility of fathoming the British mind and discovering what would satisfy it. At last England itself solved the mystery and cut the Gordian knot that had baffled the copper producers and even the official minds at Washington.

Great Britain decided what its own intention was and what would satisfy itself. As a result of this decision, Mr. Gardner, chairman of the board of Henry R. Merton and Company, Limited, of London, the world's leading copper merchants, arrived in America in early November, with peace and concord in his hand. He brought with him a glowing prospect for the copper interests, a prospect of the early trade revival for which they had longed.

The story of Mr. Gardner's mission, of its wide and deep bearings, finally---to the credit of Americans---of its rejection by American copper people, is an honorable chapter in our history, even if in the spring of 1915 we were forced into practically the same surrender we had refused in the fall of 1914.

Under the conditions brought about by the war, practically the only copper supply available for countries that did not produce the metal was the American supply. The Merton plan was a very simple one. Mr. Gardner appeared with powers from his government that have never been questioned. England would agree to take a large fixed monthly output of copper, upon the condition that American producers should ship to Europe through no other channels than British merchants.

The offer was indignantly rejected, and on November 16 Mr. Gardner returned to London, his prepared documents unsigned.

Had the proposal met with acceptance, it would have meant the desertion by American producers of hundreds of old customers who consumed copper in neutral countries, and the transferring of copper manufacturing in large measure from these countries to England, which alone could get the raw material freely. It would have meant, further, that England, controlling the world's supply of a material necessary for the manufacture of ammunition for small arms, would have an influence of very special potency over all countries not then at war.

While these events were transpiring, there was developing a copper famine in neutral Europe. To be sure, England was theoretically willing to let the European neutrals, except Holland, receive the same monthly amounts of copper which they had received in 1913. The British Embassy at Washington said in a note handed to our State Department on November 11:

"A supply of copper sufficient for normal consumption in neutral countries will not be interfered with, provided adequate guarantees are given that the copper will not be transhipped to enemy countries."

Even if the British detention policy had allowed the neutrals to receive their normal quotas, these would have been insufficient for their needs. Italy is a good example.

First, Italy was arming. This meant increased imports of copper for the Italian ammunition factories and largely explained our abnormal shipments intended for Italy in October. Moreover, Italy, like most other European countries, has in normal times heavy imports of copper manufactures from Germany. In 1912, Italy imported $4,235,000 of copper manufactures and electrical apparatus from Germany. With Germany's importation of raw copper checked, that country naturally ceased exporting copper manufactures, retaining all the raw product available to her industries for domestic, especially military, uses. Italian manufacturers were therefore called on to supply what formerly had been imported, in products of copper, bronze and brass. In America we have seen the sudden growth of certain industries after imports from Germany were cut off. In Italy it could not have been different.

The normal annual Italian consumption of copper, apart from that contained in sulphate, is over 40,000 tons. In sulphate, 20,000 tons more are used. Copper sulphate, or what we call blue vitriol, is used throughout Europe to spray vines, for the purpose of destroying the phylloxera pest. Italy needed more copper from us to make the copper sulphate which she had hitherto purchased from Germany. She also needed copper to make sulphate and other products for France, for in the early months of the war the French copper industry was paralyzed. The high price of copper in Germany had induced German manufacturers to turn over to neutrals (Italy) the filling of many orders which they---the Germans---had booked. Finally the 11-cent price of copper during the fall months tempted Italians, like other good merchants, to buy stock for the future.

England itself took in the first three months of the war a vast excess of copper over the volume for the same months of 1913. Italy, in process of arming, was under the same compulsion to have more copper; perhaps under a greater one, because Italy was more dependent than England upon the barred German copper industry. England's imports of copper from us in August, September and October were over 64,006,000 pounds. Including these imports, and including the copper diverted from Dutch warehouses and the quantities taken off steamers bound for Dutch, Scandinavian and Italian ports, England in those three months received 103,000,000 pounds of copper, an increase of 69,000,000 pounds over the same period in 1913. In August, September and October, 1914, there left our shores for Italy 25,000,000 pounds of copper, 16,000,000 more than in those months of 1913. England, in suspecting and stopping those shipments, was refusing to allow Italy an increase less than one-fourth as great as England itself took.

What has been said of Italy's need for extra copper, and the famine resulting from British detentions, applies with equal force to the Scandinavian countries.

We have instructive evidence, in England's own experience, as to the importance of a stoppage of supplies from Germany in stimulating imports by neutrals from other countries. In parliament, on November 17, 1914, a member called attention to the large increase in exports of British coal to Holland and the Scandinavian monarchies. The member implied that some of this coal might be getting through to Germany, and adverted to the fact that Mr. Asquith's constituents were largely interested in the mining of it. Mr. Asquith explained that the increased exports were "not due at all to their being ultimately destined for Germany, but to the fact that these countries (the neutrals) were deprived for the time being of the supplies they have been accustomed to receive from the enemy country."

The interests of the British exporters of copper manufactures were by no means hindered by a policy that kept every other country from getting copper at any price, while the British market was abundantly supplied. Neutral manufacturers found their supplies uncertain as well as high in price, and could not give the guarantee of delivery which the protected English manufacturer could give. The British exports of copper manufactures and copper sulphate mounted steadily in the fall months of 1914.

It is recalled that the October 29 Order in Council prohibited American shipments to neutral countries "to order." This prohibition discouraged the copper trade in particular, for most copper exports are so consigned. Even if destined for a known buyer, a copper shipment is consigned to the order of the foreign agent or banker of the American shipper. The purpose of this is plain. The ultimate consignee might be unable, for some reason, to take delivery of the shipment upon arrival. The title then remains in the American shipper. Shipments "to order" allow our foreign representative, if he thinks best, to retain possession of the copper until the Italian or Swedish consignee has satisfied him with regard to payment. Once this assurance is given, the representative of the American copper firm orders the shipment delivered to the foreign buyer.

Moreover, large American dealers regularly carry heavy stocks abroad. The United Metals Selling Company had 16,000,000 pounds of copper in Europe at the outbreak of the war. These stocks are replenished, normally, by constant shipments "to order." Shipments so coming forward may go into stock or be diverted to buyers as buyers are found. Great Britain was perfectly familiar with this method of doing business. The prohibition of "to order" shipments compelled a complete readjustment of the method of marketing and financing copper.

As an excuse for Britain's detention policy, there came from London continued absurd tales of attempts to smuggle copper into Germany through the neutral countries of Europe. Some of the tales were gross plays upon popular ignorance of steamship practice.

For example, the grave suspicions of the Allies were declared justified when copper was found concealed under a shipment of oats, in a ship unloaded at Marseilles. On November 21, London despatched to American papers the following report:

"The Norwegian steamer Tyr has been detained at Glasgow, according to a despatch to the Central News. It says that 4,000 tons of copper ore, which is contraband of war, was found in the bottom of the Norwegian steamer's hold, hidden under a cargo of general merchandise."

There is no claim made in either case that the copper in question was not upon the ship's manifest, or cargo list, open to inspection. Copper, being the heaviest of all cargo, is always placed in the very bottom of the hold to insure the stability of the ship. The lighter merchandise, such as oats, naturally is placed over it and "conceals" it. Were copper carried on deck where the boarding officers could see it at once, the ship would founder before she sailed.

When in December the Italian and Swedish steamship lines resumed the carriage of copper, they imposed the condition that none should be "in transit" and none should be consigned "to order." Moreover, a Swedish shipment would be accepted only if a cable had been received from the home government specifically reciting that it was for domestic consumption.

But even the sovereign voice of the state expressed in its re-export prohibition laws, and the certification of cargo by Washington Ambassadors of neutrals, did not suffice to prevent seizure of copper by England. On December 28, the New Sweden and Soerland, bound for Sweden, were diverted to English ports by English cruisers. One was relieved of 730 tons of copper, one of 600 tons. In each case the shipment was accompanied by a statement from the Swedish minister at Washington that the copper was for Swedish use.

At last the State Department was driven to protest. On October 22, they had sent an informal note, never made public, to England. The events of November indicated that the October protest had not severely touched the conscience of His Majesty's Government, that sensitive attribute of belligerent powers to which appeal is so generally made in the state documents of the war. As little was accomplished at the almost daily conferences in Washington between officials of our Statement Department and the British and French Embassies, devising ways and means for facilitating the trade in copper between this country and neutrals.

Our December 26 note of protest to England was primarily on behalf of copper. It was stated that great interests in this country were being deprived of their lawful markets. The note pointed out that England was going beyond the limits of international law. It stated that Britain did not seem willing to let shipments go to European neutrals even when they had imposed re-export embargoes on American products. British interference, our note stated, was so severe that a legitimate trade in copper was suffering greatly. Therefore, we said, we felt justified in asking for information as to the manner in which England proposed to carry out her policy, in order that we might determine the steps necessary to protect our citizens.

On January 7, we received an answer from England. It recited the fact that our exports of copper towards Italy and "Other Europe" from August 1 to December 21 exceeded those of 1913. It then asserted that there was strong presumption that this surplus traffic was destined for one of England's enemies, and against this contingency England must protect itself. In view of the circumstances---the note continued---surely neither the government nor the people of the United States could expect England to strain the international code in favor of private American interests.

This January 7 note was a preliminary answer to ours of December 26. On February 10, a final answer was despatched to us. It was a long note with plenty of general discussion. Mention was made of copper only once and then only incidentally. The note opened with a discussion of the reasonableness of the American complaint.

"Towards the close of your note of the 28th December your Excellency described the situation produced by the action of Great Britain as a pitiful one to the commercial interests of the United States, and said that many of the great industries of the country were suffering because their products were denied long-established markets in neutral European countries contiguous to the nations at war."

The British note then proceeded to indicate that American claims of distress due to the war had been exaggerated. It demonstrated that apart from cotton, American exports were getting to be larger than in 1913. (This was due chiefly to foodstuffs and war materials sent to the Allies.) The note stated that the difficulty of shipping to neutrals was probably closely connected with the shortage of shipping on the seas, due to the tying up of the German merchant fleet and the detention of certain British vessels in German harbors. It explained that steamships nowadays are larger than they were, and harder to search. It said that plans were alleged to have been made to move copper in cotton bales. It explained that since the German population had become identical with the army, all food for Germany was properly stopped. All of which was interesting but in no way contributory to a solution of the copper situation.

Meantime, events were working to the end which Great Britain desired: the submission of our copper trade to her control. In December the Italian Ambassador in Washington received a proposal that he should certify that copper to Italy was for domestic consumption. He indignantly rejected the suggestion. He indicated that to require this was an affront to his government, which had already prohibited the export of any copper from Italy. The Ambassador said, "Italy has given its word that no copper will be exported from its boundaries, and we shall do nothing from here to appease the apparent doubt of our integrity in the mind of England."

But in January the Ambassador had melted. On January 7 the following was announced from Washington:

"Although the Italian Government considers that its embargo against the exportation of copper is sufficient guarantee, it has decided to help American shippers in getting their cargoes across the Atlantic without delay, by certifying the consignments before they leave the United States.

"Under this arrangement the Italian Foreign Office makes an investigation of the business of the consignee and the purpose for which he seeks to use the import of copper. On learning that copper is strictly for home consumption, it authorizes a certificate to that effect to be issued by the Italian Embassy at Washington, which is submitted to the British consul at the port where the shipment is being loaded."

The reason for the Ambassador's change of heart was not far to seek. Copies reached this country of the Italian newspaper La Perseveranza, dated about the first of the year. They explained that the Italian Metallurgical Corporation, which supplies the state railways and the army and navy, had closed five works, throwing 3,000 men out of employment. It closed them because of a lack of raw material to make copper tubes, plates and ammunition.

On February 22, a London despatch reported the procedure in the case of some copper bought by a Swedish contractor to fill a contract with his government. The copper was thrown into the prize court and counsel for the contractor asked for an assurance from the British Government that it would not take and use the copper before the case was legally settled. The Attorney General said that the British Government, while it was prepared to act reasonably in the matter, could give no such assurance. If the Swedish minister desired to make any representations, he added, he must do, so through the Foreign Office. The case was adjourned on the application of the Attorney General.

To be sure, British copper dealers, known to the Admiralty and naturally favored by it, had less difficulty in getting into neutral countries the copper that they ordered forwarded from the United States. For example, when the steamship Italia was seized by the British at Gibraltar on November 8, there were aboard two consignments of copper sold to Schiapparelli, Turin. One had been shipped by the American Smelting and Refining Company, one by the United Metals Selling Company. The United Metals had sold through the mediation of an English house. The American Smelting and Refining Company had sold direct. Only the United Metals shipment ever got past Gibraltar.

Such incidents as this indicated clearly the only safe course to pursue. Despite the original repudiation of the British monopoly plan, some of the exporters had made concessions such as selling through British agents. After such plain demonstrations of the good results of such a policy, others who had held out longer began similarly to see the point.

The sentiments of the exporters are well expressed in a letter from one of them early in April, after he had submitted to the English monopoly.

"We are simply forced to take the action because of the fact that some $800,000 worth of our copper was held at Gibraltar, and also because some of the representatives of our leading competitors, resident in England, signed the Agreement some two months in advance of our signing. We held out as long as we could, chiefly because we did not wish to give up our position of independence in the matter of trading where and when it suited us best, without having to consult with the British Government."

Getting no relief from the official action of the State Department the copper men had finally asked the State Department to authorize them to deal with the British Ambassador directly. Authorization was given.

Soon after the middle of March an Agreement between the Americans and His Majesty's Government was made.(25) It recited that England would do her best to keep copper from Germany but did not desire to hinder exports to neutral countries whose re-export embargoes were found effective. While England could not forego her right of search, she was willing to let copper proceed to destination if the terms of this Agreement were fulfilled. Shipments were to be made only to named consumers (not to merchants) in the neutral countries and copies of bills of sale were to be forwarded to the Admiralty. Bills of sale were to recite that the shipment was for neutral consumption. Under these conditions copper could be exported to Italy or Scandinavia. Exports to other neutral countries were not to be made except subject to permit of the British Admiralty. "Shipments of copper to Great Britain or her Allies may be made without restriction."

This was the contract signed by American copper exporters. This was the consummation of the British detention campaign.

What was the result on German military operations of all this organized system of annoyance, detention and loss, designed to keep copper from reaching Germany?

Economic pressure was no more effective in the case of copper than in the case of cotton. From London and from Copenhagen, Geneva and Amsterdam, via London and Paris, pathetic tales were forwarded of schoolboys in Germany begging door knobs for the military, housewives being stripped of copper kettles and pans, and roofs being de-coppered. But those who had been in Germany told no such tales.

German copper consumption in 1913 was 256,000 long tons. In order to keep the works operating, the German factories carry a stock of three months' supplies, about 64,000 tons. Because of large imports in the months just preceding the war, it is likely that on August 1 a supply much larger than 64,000 tons was on hand at the factories. In addition to this, on August 1 there were on hand in German warehouses 10,000 tons. German raw copper production in 1913 was 50,000 tons, and no doubt it was largely expanded after the war began by intensive working of the mines. Probably there were readily available not less than 50,000 tons of old metal. This made a total of at least 174,000 tons available for the first year. Further, the needs were reduced by the halting of Germany's large exports of copper products, amounting in 1913 to 125,850 tons, and the interruption of internal electro-technical developments.

There is a very large supply of old copper in Germany. The average annual consumption in recent years has been 225,000 tons of raw copper and average exports have not exceeded 100,000 tons, leaving 125,000 tons every year in the country. In case of need, this supply would care for military uses for an indefinite period.

A vast amount of scrap metal is brought forth by a rise in prices. At the end of 1914 the German price quoted was 200 marks per kilo, or at the then rate of exchange, 20 3/4 cents per 100 pounds. Scrap was pouring on the market just as it did in the eighties when Secretan's copper corner failed. Secretan got control of the world's supply of raw copper, but those who' backed him could not finance the purchase of the huge amounts of scrap copper brought forth by the higher prices which the corner was causing.

A large quantity of copper has been recovered from used ammunition, and taken from positions captured from the enemy. No one has yet thought of requisitioning the hundreds of thousand tons of copper wire on the street railways of Germany. Before they are touched, the wiring and roofs of Belgium and Northern France will be stripped.

Invention of substitutes provide still another resource. It has been reported that Krupp has invented a soft steel which serves very well in place of copper.

One is tempted to subscribe to the opinion of one of the leading copper dealers of America, expressed at the end of December:

"Without denying the fact that the cutting off of the supplies of copper is annoying to the highly developed German industry, I believe it is of minor importance for the German army and navy, but I am sure the principal sufferers are the mine owners, miners and smelters in this country who are deprived of their best market.

"When 1914 statistics are going to be available you will find that while American copper production has been materially reduced owing to the war conditions, England and her colonies have continued to produce without any serious interruption; in other words, America though neutral and disinterested has to foot the bill for England's efforts to starve Germany, while the real profit goes into the pockets of the German copper mining companies and scrap dealers.

"England has gained little, America has lost much, while Germany is annoyed without being hurt."

Chapter Eleven

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