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escaped, but we agreed that, for the purposes of the Treaty, we would be bound by them; that they should form the future law between us and the Americans; and that we would do our best to get the rest of the world to adopt them. (For the three Rules, see 2841.) The last condition was not carried out, owing to a dis- agreement between the Governments of Great Britain and the United States as to the interpretation of the second Rule in a particular case (2842, 2843). One great inducement to us to make the Treaty was to obtain the three Rules; and if we had agreed to pay a sum down at once for the injuries done by the "Alabama," the whole question would have been settled without further discussion, the rest of the world would probably have adopted the three Rules, and international law on this subject would have been settled in the way most favourable to our interests (2841, 2864, 2865). Bat, owing to the preposterous demands of the United States, and our natural dissatis- faction with those demands, it was unfortunately agreed that the question of whether we had committed any breach of the law and of those three Rules should be tried by a Commission at Geneva; and we got into a wrangle, in which, in order to argue against paying damages, we were forced to argue against our own best future interests, to endeavour to prove that the three Rules had been inconsistent with previous international law, and to prevent those Rules having as wide an opera- tion in the future as they would otherwise have had. Whether or not the three Rules are consistent with pre- vious international law, they are invaluable to us, as our great danger in a war with a European Power would arise from cruizers fitted out in the United States to prey upon our trade (2841).
The first Rule, although it would not prevent the sale of a ship at a neutral port, would, under certain circumstances, prevent her departure. It might, however, be very difficult to prove the intention if a ship left port without any warlike fittings on board-e.g., if a mer- chant-steamer were sold in Liverpool, and afterwards fitted out for purposes of war, it would be difficult, if not impossible, to stop her. No vessel, intended for pur- poses of war, can be stopped, unless such vessel has been All that a neutral specially adapted for warlike uses. Government is bound to do is to prevent the departure from port of a belligerent cruizer (2844-2850).
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Declaration of Neutrality.-Under the second Rule we have issued instructions in the case of every recent war in which we have been neutral limiting the amount of coal to be supplied to belligerents in British ports. Such instructions were issued during the American Civil War, in the war between Austria and Prussia in 1866, in the Franco-German war in 1870, in the Russo- Turkish war in 1877, and in the war between Chile and Peru. Our instructions on the supply of coal to belli- gerents are the same as those which were issued previous to the Treaty of Washington. They are more stringent than any rule of international law, and more stringent than any other nation has made. There is no fixed in- ternational Rule on the subject. The three Rules only bind England and the United States. Every other nation makes what Rules it thinks fit, subject to the general principle that what it does for one belligerent it must do for the other (2861). During the American war the Netherlands at first issued an order similar to our own, but as it interfered with the coaling of the United States' cruizers, the Dutch Government revoked it at the request of the United States, and refused sub- sequently to re-issue the Rule. The Italian Government made uo order limiting the quantity of coal supplied. France made no such order; neither did Spain, and the "Sumter" did coal at Cadiz. Even under our own Rule a United States' cruizer obtained 2,000 tons of coal in two months, and the notorious "Shenandoah” took in 250 tons of coal at Melbourne and shipped a considerable number of men while she had 400 tons on board. The taking of coal and the shipping of men were both alleged at Geneva to be breaches of our duties as neutrals, but the main reliance was placed upon the shipping of men (2851-2855).
It is our interest that our own practice should he
extended throughout the world, and that other nations should put all possible impediments in the way of coal- ing belligerent cruizers in their ports. We have more ports than any other nation, and therefore, any nations with which we may be at war would be likely to obtain more advantages than ourselves from liberty to coal freely at neutral ports (2861, 2862).
Convoy. The bulk of our trade, including our enormous supplies of food, being carried in slow steamers, would be exposed to the attacks of fast Cruizers. It would be impossible to protect trade by means of convoy.
Speed is the essence of modern trade, and convoy implies delay (2866).
Marine Insurance. With regard to the effect upon marine insurance of the depredations of hostile cruizers, not only has the actual loss to be considered, but the effect of panic. Underwriters' capital is very timid, and is rapidly led into extremes by panic. (For parti- culars of war rates, see letter quoted in 2867.)
Transfer of Shipping to Foreign Flags.-The injury which belligerent cruizers would do us would not show itself in the form of numerous captures, but in driving A very our ships and our trade to the foreign flag. small increase of premium would send our trade to the flags of foreign nations, and the transfer would be effected under circumstances which would make it extremely difficult for us to stop it (2869, 2881, 2882).
Foreign ships, as they at present exist, would not be able to carry our enormous trade, but there would be little difficulty in transferring our ships to a foreign flag, and the impediments mentioned by Mr. Giffen The laws of the would not prevent such a transfer. United States now prevent a British-built ship being registered under the American flag. The United States have an immense occupation for their capital in the development of their own internal resources, and their attention has been diverted from the sea; but if they found an opportunity of getting our carrying trade under their flag upon easy terms, they would soon remove legal impediments. That particular legal form of difficulty does not exist in the case of other nations. Englishmen frequently transfer their ships to foreign flags merely to escape certain differential duties or difficulties in foreign ports, and it is equally easy for foreigners to transfer their ships to our Register. Our law provides that a British ship must be owned by a British subject, and a certain form of declaration is pre- scribed by the Merchant Shipping Acts in order to prove this before a ship-owner can be placed on the British Register. These Acts are strictly enforced, and the declaration is always regularly made. persons make false declarations, as they frequently do, we do not and we cannot go behind those declarations to inquire whether a man who makes a declaration is an Englishman or not. The process of transfer is extremely simple; it can be done for a few shillings and in half-an-hour. It is desirable that the law of transfer should be as easy and simple as possible, and it would be difficult to propose restrictions for any special which would not tell disadvantageously against purpose ordinary transactions (2870–2875). If a transfer is proved to have been colourable and in fraud of belli- gerent rights, a Prize Court would go behind the flag, and would endeavour to determine whether the ship was really British or not. A vessel always admits her nationality by her flag, and cannot deny that she is subject to all the liabilities of that flag. The captor is not bound by the flag, and may prove, if he can, that the vessel really belongs to his enemy. But such a fraud is not easy to prove, and a belligerent would Even hesitate to seize a ship under the British flag. with an efficient Prize Court a transfer to a neutral flag, however colourable, would interpose a great obstacle to capture (2876-2880).
But if
It has been suggested that foreign nations would not have capital enough to purchase our ships. Capital is, however, largely accumulating in foreign as well as in English hands, and English capital would, if needed, soon find its way to buy and own ships under foreign flags. Many English houses have partners and agents in America and elsewhere, and as capital moves readily
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