Before making good this position a preliminary point raised by the Protest must be dealt with—the bearing of the Declaration of Paris on the question. Even the learned must have been somewhat confused by the isolated, almost casual, reference to one of its rules—‘Free ships make free goods’; or to be more accurate, ‘The neutral flag covers enemy’s goods, with the exception of contraband of war.’ Its relation to the context is more than obscure, for this rule applies to the seizure of enemy property, whereas the doctrines on which the law of contraband and the law of blockade rest apply to the seizure of neutral property. It is clear, therefore, that there are two very distinct planes of thought, and we cannot step lightly from one to the other without putting in peril the logical structure of the discussion.
‘The rules of the Declaration of Paris of 1856, among them that free ships make free goods, will hardly at this day be disputed by the signatories of that solemn agreement.’
Thus, and no more, the Protest. The United States is not a signatory to the Declaration, and its final clause provides that it ‘is not and shall not be binding, except between those Powers who have acceded, or shall accede to it.’ But let us put this technical objection on one side and, admitting the rule to be a generally accepted principle, see what it has to do with the question in dispute.
The merchant promotes his trade with foreign parts by many ways, but he never loses sight of one essential: payment for his goods. It is true that credit is the life of commerce; but during war conditions are changed, and while it may be that some still adhere to peace-time customs, the ‘rumble of the distant drum’ induces others, probably the more numerous, certainly the wiser, to ‘take the cash and let the credit go.’ On the other hand, the purchaser’s object is to get the goods, more especially if he is a belligerent and the goods munitions of war: and one very sure way of obtaining possession of the document of title to them is by paying cash or by giving some substitute which the vendor accepts as its equivalent. Thus cash enables the wishes of both parties to be satisfied; and the law facilitates the acquisition of property after a sale by means of the contract for delivery of goods ‘f.o.b.,’ free on board, under which the property passes to the purchaser from the moment the goods are on board ship. Now it is obvious that if the neutral merchant is wise in his generation he will, having in view the risks ahead of him, secure payment for his goods and get rid of them ‘f.o.b.’ Then all those troublesome questions of seizure by belligerent cruisers and condemnation by Prize Courts concern him no longer. The goods become enemy cargoes consigned to one of the belligerents, the vendor has got his money, and they may go to the bottom of the deep blue sea, or into the factories of the other belligerent, for all he cares.
Here then is the puzzle. Seeing that the law makes such ample provision for his protection, allows him to trade in such fashion that he can with safety and profit get rid of his troublesome property in cargoes when he has shipped them, even in cargoes of contraband of war, what is the meaning of all this talk about the violation of the rights of the neutral merchant upon the high seas? They have vanished; and even the ingenuous protests against the too strenuous application of the doctrine of ‘continuous voyages’ lose much of their pathos when we realise that the cargoes (of, say, cotton, copper, rubber, or even foodstuffs) seized on their way to neutral ports may not be, need not be if he has exercised reasonable care, the neutral vendor’s property at all. They ought to be enemy property, or at best the property of purchasers in ‘countries which, though neutral, are contiguous to the nations at war’; and then the plaint should come from this side of the Atlantic. The whole question has now taken a different aspect, and the presumption, based on overwhelming statistics, that these neutral purchasers are acting as agents for the enemy, or are anticipating enormous profits from sales to the enemy, is wholly justified and most pertinent to the issue. Looking therefore at the case in the rough, the neutral American vendor, if he has acted with common prudence, is out of Court as a complainant. And, further, his position is vastly different from an ethical standpoint if he has chosen to give credit to the enemy, or to a purchaser who is probably the enemy’s agent; still more different, almost dwindles to vanishing-point, if he has sent the goods on the chance of ‘payment if safe delivery.’ From a purely commercial point of view, therefore, if seizures of such cargoes are to be made the basis of complaint by the Government as the legitimate mouthpiece of United States traders in the bulk, the only possible ground on which it could be presented is that they may affect trade generally; the complaint would be of ‘the injury to American commerce as a whole,’ as it was, in fact, put in the Note of the 28th of December.[33] But then the damage is too remote from the alleged wrongful injury to sustain a plea. Interference with trade is the inevitable consequence of war; the more strenuously sea-power is exercised the greater the interference, and the command of the sea inevitably makes the interference one-sided.
But it may, with respect, be questioned whether the allegation is correct. The effect of war on commerce generally must be judged by its results on commerce as a whole; there must be a general balance-sheet of United States trade in which the profits of some merchants must be set against the losses of others. Is it quite certain that American commerce as a whole has not derived much benefit from the War rather than suffered serious loss? There seems to be some confusion of the particular with the general. In regard to this ground of complaint war is entitled to the same treatment as the public good, which is never condemned for the individual wrong it does and must do, or the world would have stood still long ago.
The position of affairs may, therefore, be stated very clearly: only in those cases in which the property in the cargoes seized has not passed out of the vendor do the questions of contraband and blockade affect him. But where the property has passed to an enemy purchaser or his agent, then other questions arise which depend on the Declaration of Paris.[34]
The Declaration of Paris—Free Ships make Free Goods
The Declaration of Paris has been roundly abused by many who believe that it clipped the wings of England’s sea-power, having been expressly designed thereto and weakly assented to by England. This provision—‘Free ships make free goods’—covers goods consigned to an enemy Government! But looking at it merely as it affects neutral merchants, it fails lamentably as a practical doctrine, because in the attempt at conciseness its authors forgot to be explicit. As it stands it is not true. It has not interfered with the right of search because contraband of war is excepted, and the fundamental argument that you cannot seize if you cannot search, ‘whatever be the ships, whatever be the cargoes, whatever be their destination,’[35] still holds good. Nor has it interfered with or curtailed the rights incident to blockade; then the doctrine of the Declaration vanishes, for there are no ‘free ships’ by which the enemy’s goods may be made free, all goods on board being liable to seizure.
But the great defect of the provision is that it leaves deplorably vague the question by whom the ‘freedom’ of the enemy goods may be raised: by the neutral carrier or the enemy owner; and it is precisely this point which seems to have been ignored in the American Protest.